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China and the World Economy:A Global Value Chain Perspective on Exports, Incomes and Jobs

Author

Listed:
  • Timmer, Marcel
  • Los, Bart
  • Vries, Gaaitzen J. de

    (Groningen University)

Abstract

Based on a new dataset of world input-output tables we analyze the impact of foreign demand on Chinese factor incomes and employment since 1995. We extend the global input-output methodology introduced by Johnson and Noguera (2012) and find that exports of value added rapidly increased after 2001, peaking at 28% of GDP in 2006. During this period the increase in foreign demand added about 70 million jobs, predominantly for unskilled workers. Due to strong domestic inter-industry linkages more than half of these jobs were created outside the manufacturing sector. Foreign demand generated income for domestic capital rather than for labor, as wages remained low. The current global economic crisis strengthens the process of reorientation of the Chinese economy, which appears to have started in 2006 already. Domestic final demand for non-tradables has become the main source of growth and the sources of export income steadily shifted away from mature markets to emerging markets.

Suggested Citation

  • Timmer, Marcel & Los, Bart & Vries, Gaaitzen J. de, 2012. "China and the World Economy:A Global Value Chain Perspective on Exports, Incomes and Jobs," GGDC Research Memorandum GD-128, Groningen Growth and Development Centre, University of Groningen.
    • Handle: RePEc:gro:rugggd:gd-128
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    File URL: http://irs.ub.rug.nl/ppn/356389014
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    References listed on IDEAS

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    Cited by:

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    2. Jiang, Xiao., 2013. "Trade and employment in a vertically specialized world," ILO Working Papers 994855113402676, International Labour Organization.
    3. Xiao JIANG, 2015. "Employment effects of trade in intermediate and final goods: An empirical assessment," International Labour Review, International Labour Organization, vol. 154(2), pages 147-164, June.
    4. Erik Dietzenbacher & Bart Los & Robert Stehrer & Marcel Timmer & Gaaitzen de Vries, 2013. "The Construction Of World Input-Output Tables In The Wiod Project," Economic Systems Research, Taylor & Francis Journals, vol. 25(1), pages 71-98, March.
    5. Nadia Garbellini & Enrico Marelli & Ariel Luis Wirkierman, 2014. "Domestic demand and global production in the Eurozone: A multi-regional input-output assessment of the global crisis," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(3), pages 336-364, May.
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    7. Rosario Cervantes-Martínez & Jorge Villaseñor-Becerra & Martín Romero-Morett, 2016. "NAFTA trade (and some extra NAFTA trade) in value added and its distribution, 1995–2011," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 5(1), pages 1-22, December.
    8. Cervantes M., Rosario & Fabián Rojas, Ana Sofía & Fujii Gambero, Gerardo, 2016. "The labour content of Mexican manufactures, 2008 and 2012," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.

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