Import Competition from the United States and Employment of Chinese Manufacturing Enterprises

Abstract

The escalating of Sino-US trade friction has become a hot topic widely concerned by the government and academia. The United States has frequently initiated trade disputes with China on the grounds that the Sino-US trade surplus is too large and import competition from China has robbed the employment opportunities of US. The Sino-US economic and trade relationship is the “ballast stone” and “stabilizer” of the relationship between the two major powers. It is of great significance to stabilize Sino-US economic development. China’s expansion of imports from the United States is one of the feasible ways to alleviate Sino-US trade frictions. However, the question is whether the import competition from the United States will have a negative impact on China’s manufacturing employment?To answer this question, this article examines the impact of import competition from the United States on employment in China’s manufacturing industry and its mechanisms from the perspective of enterprises and industries. The results show that: On the whole, import competition from the United States has significantly promoted the employment growth of Chinese manufacturing enterprises. Import competition from the U.S. mainly affects the employment growth of enterprises through two channels: promoting enterprise innovation and increasing enterprise markup. From the perspective of upstream and downstream related industries, import competition of the upstream industry has a significant promotion effect on the employment growth of enterprises, and import competition of the downstream industry has a significant inhibitory effect on the employment growth of enterprises; From the industry level, import competition from the United States has no significant impact on the overall employment of China’s industry.The academic value of this article is mainly reflected in three aspects: First, existing research mainly examines the impact of import competition from China on the employment of importing countries from the perspective of Western developed countries. However, there are few studies focus on the impact of import competition from other countries on employment in China. Therefore, this paper is an important supplement to the existing literature. Second, this paper not only constructs the import competition indexes of consumer goods, intermediate goods and capital goods from the perspective of heterogeneous import products, but also further constructs the import competition indexes of upstream and downstream industries, and comprehensively examines the impact of import competition from the United States on China’s manufacturing employment. Third, the conclusions of this paper can provide policy guidelines for mitigating Sino-US trade friction.