Title Page
Abstract
국문초록
Contents
1. Introduction 18
1.1. Research background 18
1.1.1. US-China trade friction 18
1.1.2. China's rising labor costs and its relocation of labor-intensive sectors 20
1.1.3. China's industrial upgrading 23
1.2. Research significance 26
1.3. Structures of this dissertation 26
1.4. Research methodology 29
1.5. Research innovation 29
2. Literature Review on Labor-intensive Industries 31
2.1. Definition of, and the theoretical basis for, labor-intensive industries 31
2.1.1. Definition 31
2.1.2. Labor cost and labor-intensive sectors' relocation 33
2.1.3. The comparative advantage 34
2.2. Extensive and intensive margin of China's exports 36
2.2.1. Measurement of extensive and intensive margin 36
2.2.2. Gravity model of influencing factors on dual margins 37
2.3. Constant market share methodology 39
2.4. Armington elasticity 40
3. China's Labor-intensive Manufacturing Industries 44
3.1. Exports performance 44
3.1.1. China's exports of labor-intensive goods 44
3.1.2. National exports performance 45
3.2. Labor wages and relative unit labor cost 48
3.2.1. Labor wage in China 48
3.2.2. Labor wages (China and competitors) 53
3.2.3. Labor productivity (China and competitors) 55
3.2.4. Relative unit labor wage (China and its competitors) 56
4. Margins of China's labor-intensive goods and major factors 59
4.1. Introduction 59
4.2. Modelling formulation 63
4.3. Data and summary statistics 66
4.4. Estimation results 73
4.5. Conclusions 77
5. CMS Decomposition of Exports in Labor-intensive goods 80
5.1. Introduction 80
5.2. Literature on labor-intensive sectors 82
5.3. China and Vietnam's labor-insensitive sectors 84
5.3.1. Exports of 10 labor-insensitive sectors 84
5.3.2. RCA of labor-insensitive sectors 86
5.2.3. China and Vietnam's exports of labor-insensitive sectors to the US 88
5.4. CMS decomposition for the assessment export position 90
5.4.1. Modelling and explanation 90
5.4.2. Numerical analysis results 93
5.4.3. Comparison of the first order CMS decomposition of China with Vietnam 96
5.4.4. Comparison of the second-order decomposition of China with Vietnam 98
5.4.5. China's performance after being imposed additional tariffs by the US 99
5.4.6. Comparison of export position of 10 products for China and Vietnam 102
5.5. Conclusions 105
6. Empirical test for Armington elasticity 107
6.1. Introduction 107
6.2. The empirical model 108
6.3. Data 109
6.4. Estimation 110
6.5. Conclusions 113
7. Conclusions and Implications 115
7.1. Conclusions 115
7.2. Implications 118
Reference 120
Table 1-1. China's regional classification 20
Table 1-2. Urban manufacturing labor population in different regions of China 21
Table 1-3. Urban manufacturing wage rates in different regions of China 22
Table 1-4. Gross domestic expenditure on R&D (GERD) and Researchers in full-time equivalents (RFTE) 25
Table 2-1. Labor-intensive products 32
Table 2-2. 10 LISs' SITC code and the corresponding relationship with 2digit HS code 33
Table 3-1. The 10 top competitors of China according to exports in 2019 and 2020 46
Table 3-2. China's monthly urban wage and employed population (EP) in manufacturing 49
Table 3-3. Migrant worker population, manufacturing labor force, and labor cost 50
Table 3-4. Regional composition of migrant workers by working place 52
Table 3-5. Regional composition of migrant workers by origin place 52
Table 3-6. Trends in manufacturing wages of selected countries 54
Table 3-7. Trends in manufacturing wage indices of selected countries 55
Table 3-8. Manufacturing industry labor productivity indices for selected countries 56
Table 3-9. Relative unit labor cost for manufacturing in the selected countries 57
Table 4-1. China's export categories and simple extensive margins for major partners 60
Table 4-2. Number of China and its competitors' export category to the world 61
Table 4-3. China's export category to partner countries 68
Table 4-4. Simple extensive margin for China with major partners 69
Table 4-5. Simple intensive margin for China with major partners 70
Table 4-6. H&K extensive margin for China with major partners 71
Table 4-7. H&K intensive margin for China with major partners 72
Table 4-8. Results from the F-statistic regression test and the Hausman test 73
Table 4-9. OLS estimations for dual-margin influencing factors 74
Table 4-10. PPML estimator results for dual-margin influencing factors 75
Table 5-1. RCA Comparison of China and Vietnam's exports in LISs 87
Table 5-2. The CMS decomposition results for US imports from China 94
Table 5-3. The CMS decomposition results for US imports from Vietnam 95
Table 5-4. Wages in manufacturing and the US tariff for China and Vietnam 100
Table 5-5. The 10 sectors' additional tariff the US imposed on China 100
Table 5-6. The US' CMS decomposition results of imports from China 101
Table 5-7. The CMS decomposition results of US imports from Vietnam 101
Table 5-8. CMS decomposition for 10 sectors' exports to the US 103
Table 5-9. The top five exporting countries of SITC 83 to the US from 2015 to 2020 104
Table 5-10. Comparing China and Vietnam's 10 sectors' performance 105
Table 6-1. ADF test for China's textile exports to the US from 2003 to 2019 110
Table 6-2. ADF test for residuals of China's exports 111
Table 6-3. ADF test for Vietnam's exports of textile to the US from 2003 to 2019 112
Table 6-4. ADF test for residuals of Vietnam's exports 113
Figure 1-1. US-China trade conflict progression 19
Figure 1-2. The labor-intensive sectors' export volume by region 23
Figure 1-3. Structure of this study 28
Figure 3-1. China's LIMPs exports and total exports to the world 45
Figure 3-2. China and the five major competitors' LIMP exports 47
Figure 3-3. Share of China and its five biggest competitors' LIMPs exports 48
Figure 3-4. Trend of China's labor force proportion and wage on manufacturing 51
Figure 5-1. The progress of trade war between the US and China 82
Figure 5-2. China's exports of LISs and their proportions 85
Figure 5-3. Vietnam's exports of LISs and their proportions 85
Figure 5-4. LISs shares of world exports compared to RCA indices 88
Figure 5-5. World exports and US imports of the 10 LISs 89
Figure 5-6. The trend of the US imports of 10 LISs from China, Vietnam, and World 90
Figure 5-7. Components and implications of CMS decomposition 92
Figure 5-8. The contribution of the three effects of China 97
Figure 5-9. The contribution of the three effects of Vietnam 98