Abstract
This paper calculated the extensive margin, price margin and quantity margin of trade growth between China and Japan during 2000-2018, and analyzed the impact of rising labor costs on trade between China and Japan based on the perspective of ternary margins. The results show that the rising labor cost has both positive and negative effects on the growth of China’s export to Japan, also has different effects on different kinds of products. Specifically, there are significant positive effects on the extensive margin of animal and plant products and textile products, the price margin of chemical products and the quantity margin of textile products. The Government should formulate relevant policies, make the labor factors have reasonable distribution, and promote the long-term and stable development of trade between China and Japan.
Highlights
As the two largest economies in Asia, China and Japan are important trading partners to each other
Through theoretical analysis and empirical results, we can get the following conclusion: The change of labor cost has a significant impact on the ternary margins on the trade between China and Japan, and for different types of products, there are differences
The rise of labor cost has a positive effect on the extensive margin of animal and plant products, textile products and miscellaneous products, the price margin of chemical products and the quantity margin of textile products
Summary
As the two largest economies in Asia, China and Japan are important trading partners to each other. According to the data in 2017, Japan is China's third largest trading partner, while China is Japan's second largest commodity exporter. Under the framework of RCEP and CPTPP, China-Japan trade relations may play a stabilizing role in Global trade. China and Japan have established direct FTA relations within the framework of RCEP for the first time, the importance of China-Japan trade relations in the future global trade relations is expected to be further highlighted. Studying the specific impact of labor cost changes on China's foreign trade is conducive to improving China's foreign trade structure. From the perspective of ternary margins, this paper discusses the impact of rising labor cost on trade between China-Japan, so as to provide reference and suggestions for promoting trade
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