Domestic value added and employment generated by Chinese exports : a quantitative estimation

Authors

Xikang CHEN, Academy of Mathematics and Systems Science, Chinese Academy of Sciences, China
Kwok Hon, Leonard CHENG, Hong Kong University of Science and Technology
K. C. FUNG, University of California, USA
Lawrence J. LAU, The Chinese University of Hong Kong
Yun Wing SUNG, The Chinese University of Hong Kong
K. ZHU, Academy of Mathematics and Systems Science, Chinese Academy of Sciences, China
C. YANG, Academy of Mathematics and Systems Science, Chinese Academy of Sciences, China
J. PEI, University of International Business and Economics
Y. DUAN, Academy of Mathematics and Systems Science, Chinese Academy of Sciences, China

Document Type

Journal article

Source Publication

China Economic Review

Publication Date

12-1-2012

Volume

23

Issue

4

First Page

850

Last Page

864

Publisher

Elsevier BV

Keywords

Chinese exports, Domestic value added, Employment, Input–output analysis

Abstract

We develop an input-output methodology to estimate how Chinese exports affected the country's total domestic value added (DVA) and employment in the years 2002 and 2007. For every US$1000 dollar of Chinese exports in 2007 (2002), DVA and employment are estimated to be US$591 (US$466) and 0.096 (0.242) person-year, respectively. To implement these estimations, we use hitherto unpublished Chinese government data to construct several completely new datasets, including an input-output table with separate input-output and employment-output coefficients for processing exports, non-processing exports, and output for domestic use. We hypothesize that, in comparison with the export sector, China's domestic sector would be relatively autarkic due to China's history of central planning. We expect that exports would generate less OVA and employment than output for domestic use. Processing exports, which are highly dependent on imported inputs, would similarly generate less DVA and employment than non-processing exports. Our findings support these expectations. For both 2002 and 2007, the OVA and employment effects of domestic final demand were higher than those of non-processing exports, which were in turn higher than those of processing exports. However, with the progress of economic reforms, we found that the total DVAs of exports and domestic final demand have converged from 2002 to 2007.

DOI

10.1016/j.chieco.2012.04.003

Print ISSN

1043951X

E-ISSN

18737781

Publisher Statement

Access to external full text or publisher's version may require subscription.

Full-text Version

Publisher’s Version

Language

English

Recommended Citation

Chen, X., Cheng, L. K., Fung, K. C., Lau, L. J., Sung, Y.-W., Zhu, K,...Duan, Y. (2012). Domestic value added and employment generated by Chinese exports: A quantitative estimation. China Economic Review, 23(4), 850-864. doi: 10.1016/j.chieco.2012.04.003