How important are exports for job growth in China? A demand side analysis

We analyze the impact of foreign demand on Chinese employment creation by extending the global input–output methodology introduced by Johnson and Noguera (2012). We find that between 1995 and 2001, fast growth in foreign demand was offset by strong increases in labor productivity and the net effect on employment was nil. Between 2001 and 2006, booming foreign demand added about 70 million jobs. These jobs were overridingly for workers with only primary education. Since 2006 growth in domestic demand for non-tradables has become more important for job creation than foreign demand, signaling a rebalancing of the Chinese economy.