China's biased technological progress, labor market allocation and the change of trade division structure

Abstract

China is facing the dual background of the biased technology change and the contraction of global division system. It is important to understand the evolution of the direction of technological progress and the resulting change in the shares of value added at home and abroad. This paper reveals the typical facts of the coexistence of China's technological progress in favor of high-skilled labor and the increase in the share of value added of the domestic division. We prove that skill-biased technological progress has a positive effect on improving the revenue of the domestic industrial division. The distortion of labor market allocation has an inhibitory effect on the local share of division brought about by biased technological progress. The change of technological gap has a nonlinear regulating effect. The narrowing of the technological gap between China and advanced countries is an important driving force to promote the reconfiguration of the industrial division system in domestic and foreign markets. Under the background of the contraction of the global division system, the conclusions have some enlightening significance to form resilient industrial chains in the domestic division system.