The Drivers of Employment Manufacturing Growth

ABSTRACT

In this paper, we analyze the evolution of China’s production structure. Through the use of a subsystem approach and world input-output tables, we assess the role played by domestic and foreign final demand in the Chinese manufacturing subsystem. The results indicate that the importance of domestic demand has increased since the years of the crisis, forming a U-shape over the period. The dependence on foreign demand remains crucial for high-tech subsystems, and the medium high-tech subsystems are central to the growth of domestic demand. In addition, final demand and labor intensity play a significant role in employment growth.

KEYWORDS:

• China
• subsystem
• manufacturing
• final demand
• technological intensity
• structural decomposition analysis

JEL CLASSIFICATION:

• L16
• L60
• O14
• P51

Acknowledgments

We would like to thank the reviewer and two anonymous reviewers for their suggestions and comments

Disclosure Statement

No potential conflict of interest was reported by the authors.

Notes

1. For additional details, see Miller and Blair (2009).

2. We can define the change between t1 and t0 of the vectors constituting the net final demand as: $\mathrm{\Delta }\widehat{\mathit{ch}}={\widehat{\mathit{ch}}}^{\mathit{t}1}-{\widehat{\mathit{ch}}}^{\mathit{t}0}$; $\mathrm{\Delta }\widehat{\mathit{cg}}={\widehat{\mathit{cg}}}^{\mathit{t}1}-{\widehat{\mathit{cg}}}^{\mathit{t}0}$; $\mathrm{\Delta }\widehat{\mathit{in}}={\widehat{\mathit{in}}}^{\mathit{t}1}-{\widehat{\mathit{in}}}^{\mathit{t}0}$; $\mathrm{\Delta }\widehat{\mathit{iv}}={\widehat{\mathit{iv}}}^{\mathit{t}1}-{\widehat{\mathit{iv}}}^{\mathit{t}0}$; $\mathrm{\Delta }\widehat{\mathit{ex}}={\widehat{\mathit{ex}}}^{\mathit{t}1}-{\widehat{\mathit{ex}}}^{\mathit{t}0}$; $\mathrm{\Delta }\widehat{\mathit{im}}={\widehat{\mathit{im}}}^{\mathit{t}1}-{\widehat{\mathit{im}}}^{\mathit{t}0}$.

3. We chose to include the IVC effect in the SDA because of the presence in the WIOT of the vector “inventories and valuables change”. This vector is a component of final demand. Our intention is to have pure effects of the other components of final demand. In this way, we chose to create a different effect for the vector of “inventories and valuables change” and not to add it to another component of final demand.

Additional information

Funding

This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.

Notes on contributors

Claudio Di Berardino

Claudio Di Berardino is an Associate Professor at the Department of Neuroscience and Imaging of the University G. d’Annunzio of Chieti-Pescara and a member of the Italian Economic Association. He received his PhD in Economics and History of Land (University of Pescara). He has extensive research in regional growth and disparities, wellbeing and quality of life, migration and development, structural change, and industrial districts.

Ilaria Doganieri

Ilaria Doganieri holds a PhD in Business and Behavioural Sciences from the University G. d’Annunzio of Chieti-Pescara.

Gianni Onesti

Gianni Onesti is an Assistant Professor at the Department of Neuroscience and Imaging of the University G. d’Annunzio of Chieti-Pescara. He received a PhD in Economics and Business. His research interests include the structural change of the production system (with a focus on the input-output methodology), management and business administration.