Impact Of Global Value Chain Embeddedness On Employment In China

After being a member of World Trade Organization,China is experiencing a fast increase in trade volume and a diversity of international trade participation mode.China has occupied a large part of total world trade volume while its tremendous trade figures still could not reflect its authentic trade participation situation like trade gaining,export quality and the position in the global value chain.To remedy the limitation of traditional trade counting method,global value chain analysis has been introduced.Compared with the countries located in the upstream of value chain,China earns less profit as processing and assemble the intermediate product is still its general way of trade participation.The low-skilled labour is more likely to be impacted negatively by global value chain embedding.Therefore,a research into this problem is necessary for finding out credible suggestions for the development of labour market.The main purpose of this thesis is to study the impact of manufacturing global value chain embedding on manufacturing employment.In order to achieve this goal,this paper uses the data of 18 manufacturing industries in China from 2000 to 2014 in the world input-output database and the data of China’s science and Technology Statistical Yearbook for quantitative empirical analysis.The global value chain participation index and global value chain position index are used to measure the embedding of global value chain.These two indicators describe the situation of Chinese manufacturing industry participating in global value chain from two dimensions: value chain participation degree and value chain position.The empirical results show that the participation degree of global value chain of China’s manufacturing industry has a negative impact on the number of employment.and a positive impact on employment wages;the position of global value chain of manufacturing industry has a negative impact on employment wages.Global value chain is a double-edged sword,which creates new opportunities for the domestic manufacturing labor market while it increases the employment pressure for low-skilled workers.Therefore,this paper suggests that we should speed up the large-scale labor training system,cultivate more high-quality workers,establish unemployment security mechanism to help workers through difficult times,encourage enterprises to develop core technology to enhance international competitiveness,and continue to improve the output of industry.