An Empirical Study Of The Impact Of Rising Labor Costs On Exports Of Manufacturing In Southeast China Based On PVAR

In recent years,China’ s demographic dividend has been disappearing and the Lewis turning point has appeared in china,the "shortage of migrant workers" has frequently occurred in the southeastern region.The labor costs of manufacturing industries have risen sharply,and the growth of manufacturing exports in the southeast region has also shown a downward trend.So,how much negative impact does the increase in labor costs have on exports?What is the difference between short-term effect and long-term effect?What are the differences between different manufacturing industries?What are the differences between different regions?The study of these issues is important for the sustainable development of export trade in the Southeast,and for revealing the correlation between wages and exports,and then for the formulation of relevant national policies.On the basis of combing the research results of domestic and foreign scholars,this article first uses classical production theory to reveal the relationship between labor costs and commodity prices,and reveals the mechanism of labor costs,labor productivity,and exports.Secondly,drawing on the classical theory of international trade,an international trade model of a production factor in two regions and the labor force is constructed,which proves that the low labor cost does have a comparative advantage in international trade,and further proves that the increase in labor costs affects the labor force.The suppression of the use of one element and the promotion of the use of other elements such as capital,technology,etc.,indicate that rising labor costs are indeed conducive to structural transformation of the manufacturing industry.Again,in the empirical analysis,this paper selects processing and manufacturing data from 8 provinces(including Guangdong,Guangxi,Fujian,Zhejiang,Jiangxi,Anhui,Jiangsu,and Shanghai)in the southeastern region from 1990 to 2016.The PVAR model uses variance decomposition to study the degree of labor cost labor export of different lag periods to explain the current manufacturing export,and uses impulse response function to study the response of manufacturing export to labor cost and labor productivity impact.The research conclusions are as follows:(1)Labor costs have both positive and negative effects on manufacturing exports.The positive effect is reflected in the increase in labor costs that can promote the transformation of manufacturing industries in the southeast from simple low-tech manufacturing to complex high-tech manufacturing,thereby increasing manufacturing.Industry export competitiveness;negative effects reflect the rise in labor costs through the cost transfer mechanism to make manufacturing export products in the southeastern region lose price competitiveness.(2)The cost of manufacturing in the southeastern region has already widened the gap with Vietnam,and its export products do not have a price advantage in the international market.And along with the per capita income is similar to European and American countries,the continued increase in labor costs is also a driving force.Therefore,the manufacturing enterprises in the Southeast need to abandon past price wars,speed up R&D,form their own core competitiveness,and establish their brand in the international market.(3)The positive effect of rising labor costs on manufacturing exports in southeastern China will be more effective in the long run,and negative effects will be more detrimental to manufacturing in the short term.Because the increase in labor productivity needs not be achieved overnight,the improvement of production technology requires an accumulating process.Finally,some policy recommendations were put forward,mainly including:(1)Solid and steady progress in the construction of "One Belt and One Road"(2)Local governments should formulate scientific and appropriate wage guidelines.(3)Strengthen education for laborers and improve the quality of the workforce.(4)Processing and manufacturing enterprises must strive for innovation and transformation and upgrading.(5)Strengthen industrial cooperation and coordinate industrial development.(6)The population adjustment policy should be appropriate.The main innovations of this paper are:(1)Previous studies on the impact of rising labor costs on exports have been the existence of differences and disputes,and are mainly based on theoretical derivation,and they have mostly stayed at the level of one country,lacking analysis at the regional level.(2)The combination of quantitative and qualitative methods.Some of the existing empirical methods use time series data.In this paper,the panel data is used.The mathematical model tool and the impulse response method based on panel autoregressive model are used to quantify the labor force cost、labor productivity and the mutual influence of exports.