Research On The Impact Of Rising Labor Costs On The Structural Changes Of China's Manufacturing Industry

As the foundation of the country,the device of rejuvenating the country,and the foundation for strengthening the country,manufacturing industry plays a pivotal role in the entire national economy.The level of manufacturing industry development also reflects the overall productivity level of a country.Since the reform and opening up,China's manufacturing industry has achieved rapid development with low labor costs,but excessive reliance on cheap labor force has also made China's manufacturing industry's independent R&D capabilities and technological innovation level weak,and has been at the bottom of the smile curve.In recent years,the cost of labor in our country has been continuously rising,and the existing advantages of the manufacturing industry have gradually weakened.It is no longer sufficient to rely solely on labor input to meet the long-term development of the manufacturing industry.The manufacturing industry in China needs to change its methods,adjust its structure,and seek new development paths.Then,does rising labor cost have an impact on the adjustment of China's manufacturing structure?What kind of impact?This paper discusses the above issues through theoretical analysis and empirical test.Based on the current situation of rising labor costs and structural changes in the manufacturing industry,this paper analyzed the optimization and upgrading trend of China's manufacturing industry by constructing rationalization and height indicators of the manufacturing industry.From the four aspects of consumer demand structure,labor quality,enterprise production cost,and efficiency wage,elaborated the mechanism of the impact of rising labor costs on the manufacturing structure.At the same time,according to the method of progressively technological level,the manufacturing industry is divided into three major industrial types:low,medium and high-end technologies.Based on the 2005-2016 provincial panel data processed according to the above classification criteria,we established static and dynamic panel data models.The explained variables were the rationalization and height indicators of the sub-regional manufacturing structure,and the explanatory variables included sub-regional labor costs,Engel.Coefficients,foreign direct investment,R&D intensity of science and technology,investment in fixed assets,etc.,were respectively analyzed using FGLS and the two-step system GMM to examine the specific impact of labor costs and other control variables on the structural changes of the manufacturing industry.Through the above analysis and research,the following conclusions have been drawn:Firstly,in recent years,the high-end technology industry in China's manufacturing industry has developed rapidly,and it has remained at the leading position in terms of output value,number of employees,and profits,and the manufacturing structure is undergoing continuous optimization and upgrading.Secondly,the increase of labor costs has significantly improved the rationality and high level of China's manufacturing industry structure,and promoted the optimization and upgrading of the manufacturing structure.Thirdly,the improvement of R&D innovation intensity and the acceleration of urbanization have promoted the upgrade of the manufacturing industry structure.Although the increase in fixed asset investment has promoted the rationalization of the manufacturing structure,it has hindered the heightened structure of the manufacturing industry.Lastly,the degree of optimization and upgrading of the manufacturing structure in the previous period has a significant positive effect to the structure of the current manufacturing industry.And the optimization and upgrading of the manufacturing structure is a continuous dynamic adjustment process.Based on the above analysis,this paper proposed relevant countermeasures and suggestions:change the concept and method of development,utilize innovation to drive the development;increase personnel training and improve the quality of the workforce;adopt different policy measures for different types of industries to promote the coordinated development of various industries.