GTAP Resources: Resource Display
| GTAP Resource #7573 |
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"[Value] chain reactions: how does China’s upskilling affect other industrializing economies?" by Corong, Erwin, Ian Coxhead, Varan Kitayaporn and Anna Strutt Abstract How does China’s successful move up the manufacturing value chain affect similar efforts by other economies? It is well known that in the past decade China has greatly increased its overall manufacturing capacity. It has also dramatically altered the manufacturing product mix away from labor-intensive assembly, becoming the world’s largest exporter of medium to high skill-intensity products. The changing product mix comes in part from industrial policies directed at skill and technology-intensive sectors, and in part from an unprecedented increase in the stock of tertiary-educated workers that those industries require. In other industrializing economies, however, the scale and composition effects of China’s manufacturing success may reduce skills demand in the medium run, and by depressing the skill premium, lower skills supply in the longer run. We use the GTAP model of world economy and trade to simulate the effects of changes in China’s production and export mix on changes in the trade patterns and skill premia of other middle-income industrializers. We find large effects, especially in Asian regional economies whose manufacturing product mixes are most similar to China. For many countries skill premia decline, and primary sectors expand. We quantify welfare changes transmitted through domestic product and labor markets, discuss longer-run development prospects, and explore possible policy responses. |
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- Economic development - Labor market issues - Asia (East) - Asia (Southeast) |
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Public Access  Paper (119.3 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM
