How “Made-in-China” Boosts U.S. Employment- An Empirical Analysis of “U.S. Content” in China’s Exports of Manufactured Goods

Wang Xiaosong 1, Zhou Jiachen 2and Zhai Guangyu 3

1 School of Economics, Renmin University of China, Beijing, China
2 School of International and Public Affairs, Columbia University, New York, USA
3 School of Finance, Dongbei University of Finance, Dalian, China

Abstract:  This paper aims to examine the specific ways in which China’s exports of manufactured goods to the United States boost the U.S. job market. Using the OECD STAN Bilateral Trade Database by Industry and End-use Category to calculate the share of U.S. intermediate products used in the manufactured goods China exports to the U.S., this paper finds that the “U.S. content” in China’s exports of manufactured goods to the U.S. increases with the technology content of the goods and shows a decreasing trend over time. From 2006 to 2010, the average “U.S. content” in China’s exports of manufactured goods to the U.S. was 1%, and such content in China’s exports of high-end manufactured goods was 1.6%. On this basis and using the employment-output ratio in the U.S. Employment Demand Matrix, this paper concludes that as many as 1.71 million jobs have been created by the U.S. intermediate products used in China’s exports of manufactured goods to the U.S. during the same period. Thus, the development of Sino-U.S. trade has a positive impact on the job market in the U.S.. By contrast, instead of improving the employment situation in the U.S., the RMB appreciation proposed by the U.S. might even have a negative effect.

Keywords: made in China, employment promotion, U.S. content, vertical specialization

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