Research Of The Impacts Of Global Value Chain Participation On Employment In China

With the proceeding of economic globalization,the flow of factors in the form of globalized division of production has become more and more frequent.The emergence of global value chains has provided China opportunities to participate in the world economy more quickly.As the largest trading country,how China can take advantage of the global value chains to motivate domestic industries and achieve the goal of employment promotion has become an urgent issue for consideration.Based on the above reasons,this paper integrates the impact of GVC participation on employment based on the WWZ decomposition method(2013),calculates the degree of forward and backward participation in 25 major industries of China from2005 to 2014 through the WWZ value added analysis method,and calculates two examinations of the GVC participation and GVC location indices based on the Koopman defined values of the variables and related conclusions.After the descriptive data analysis of related variables,employment was included in the same model as GVC participation for regression analysis.After that,regressions are conducted on the sample classification,and then compare the data to analysis and lead to the conclusions.From the perspective of GVC participation,conclusions are as follows: firstly,for GVC participation,there are obvious differences in the degree of GVC participation among Chinese industries.during 2005-2014,the overall GVC participation of Chinese industries has experienced stages such as rising before the financial crisis,falling during the crisis,and rebounding after the crisis.Compared with other industries manufacturing industry in general shows a more obvious increase in GVC participation.On the other hand,China’s overall industry GVC position index is positive during the period under examination,and the trend of GVC position index of each industry remains consistent with the overall industry and improves significantly during this period.Secondly,from the aspect of employment decomposition,China’s participation in GVCs has a positive impact on domestic employment in general.Due to the financial crisis,GVC participation has a negative impact on domestic employment in some years.The industry spillover effect,feedback effect and intermediate goods change effect show positive effects on employment during 2005-2014;during the period of time before the financial crisis,the final goods change effect shows negative effects on employment.Among the employment decomposition effects caused by participation in GVCs,the feedback and spillover effects have a greater impact on employment,much higher than the intermediate goods change effect,and the final goods change effect.Except for some years influenced by the economic crisis,the feedback and spillover effects show positive effects on domestic employment in most years.Finally,examining the effects of GVC participation and GVC location index on employment,we conclude that: firstly,GVC participation has a significant negative effect on employment in 25 industries in China during 2005-2014,while GVC location index has a significant contribution to employment.A disaggregated analysis of Chinese industries reveals differences in the effects of key variables on employment,but the overall results are in the same direction as the overall industries analysis findings.ii)GVC participation has a negative effect on employment in 25 industries in China during 2005-2014,while GVC location index has a significant contribution to employment.iii)GVC location index has a negative effect on employment in 25 industries in China during 2005-2014.GVC participation have no significant effect on employment.Categorical analysis of Chinese industries reveals differences in the effects of key variables on employment,but the overall results are in the same direction as the overall industry analysis findings.Secondly,an examination of 25 industries over the period 2005-2014 found that industry annual output as well as the share of FDI showed an overall positive effect on employment.The industry average wage level,output input share and higher education enrollment show a negative effect on employment overall within the examined range.Therefore,to increase China’s participation in global value chains,firms should reduce their dependence on imports and continuously reduce the replacement of domestic labor by foreign labor to increase the demand for domestic labor.China should promote the export of intermediate goods,reduce the foreign value added of products to an appropriate extent,and balance the improvement of GVC participation as well as location index to promote employment.