The Employment Effect Of Processing Trade

The development history of China's processing trade can be traced back to the"feed and raise" business in the 1950s.It has experienced the deterioration of sino-soviet relations,the great leap forward,the cultural revolution,the Asian financial crisis,the accession to the WTO and the global financial crisis in the past 60 years.Processing trade has been constantly adjusting to meet the development needs of the country,and its contribution to the economy is huge.Processing trade is an important form of China's participation in global value chain division,development of industry,promotion of employment and expansion of foreign exchange reserves.China's general trade grew by 2.1%in 2015,processing trade fell by8.8%.China's general trade fell by 1.1%in 2016,processing trade fell by 4.6%.The decline of the processing trade has been bigger than the total foreign trade for two consecutive years.The share of China's processing trade in total foreign trade fell from more than 50%to less than one-third.This is mainly because China's processing trade is under double pressure at home and abroad.From 2000 to 2016,China's manufacturing hourly wage rose from $0.61 to $3.60,the average annual increase is 31%.The cost of industrial land in coastal areas has doubled continuously,and the increase of production cost in processing and manufacturing industry has made its marginal benefit smaller and smaller.China's comparative advantages such as low production cost over the years have been gradually lost.Vietnam,myanmar and other southeast Asian countries prepared for a new round of industrial undertaking by taking advantage of their labor advantages.As a result,China's total import and export volume of processing trade continued to decline,and there was negative growth.Some scholars in the new era believe that the role of processing trade is exhausted and that China should let it go.This article disagrees that view and believes that the processing trade should be "soft landing" and gives explanations from the perspective of industrial life cycle and employment.This paper argues that processing trade has a life cycle,and its employment effectvary at different stages of the life cycle.In this context,this article first uses the industry growth rate method and Peel curve to describe the growth curve of processing trade,and divides the development stage into four stages:childish,growth,maturity,and recession.Then,using the input-output table to calculate the employment effect of processing trade in each stage.On this basis,the logarithmic indicator decomposition method is used to study the causes of employment fluctuation in each stage.This article has reached the following conclusion:1.China's processing trade has experienced childishness,growth,maturation and recession;2.Although processing trade is in decline,but because of its growth and development in China for many years,the base is large,so its effect on employment is still very strong;3.The amount of employment driven by different sectors at different stages is different,and the influence of various sectors' import and export at different stages on employment is different;4.In different sectors at the same stage,the labor-intensive type has the strongest ability to drive employment,followed by the technology-intensive sector,and the capital-intensive sector is weaker;5.The expansion of export scale is the main cause of employment,the expansion of imports,the change in the full employment coefficient caused by technological change is the main reason to reduce employment.In the international market,on the one hand,our main trading partner markets are too concentrated,we are in the buyers' markets.On the other hand,Southeast Asian countries such as India and Vietnam are ready to undertake a new round of international industrial transfer.In the domestic,the first is that we are in the process of industrial transformation and upgrading.Technology-intensive industries squeeze labor-intensive industries,resulting in the loss of work in the middle and low-end labor force.Second,higher labor costs have increased the cost of labor.Third,the domestic economy has shifted from a high-speed growth phase to a high-quality development phase.The transformation of basic socialist contradictions requires us to coordinate all parties and promote economic development while taking into account balanced development.Based on the actual situation at home and abroad,in order to promote the "soft landing" and better development of processing trade,this article proposes:1.Expand domestic demand;2.Explore new international markets with "One Belt And One Road";3.Promotion of education and R&D;4.The government needs to actively guide the transformation and upgrading of enterprises.processing trade industry.Based on thiBased on the theory of industrial life cycle,this paper divides the stages of thes,it uses the borrow input-output model to calculate the employment effects at each stage and breaks down the causes of employment changes at each stage.We explore the export scale,the import scale,the technological progress,the commodity structure,which promotes employment and which reduces the employment.At the same time,according to the effects of various parts in different periods,it put forward targeted opinions,which not only embodies the scientific development concept of seeking truth from facts and respecting objective laws.And it has a certain practical significance.