Business and economic researchers agreed that data shows trade with China affected U.S. employment in a "Big Data China" event presented by the Center for Strategic and International Studies (CSIS) last month.
Scott Kennedy, CSIS senior adviser and trustee chair in Chinese Business and Economics, hosted “Chinese Imports and American Jobs: A Reassessment: A Big Data China Event,” via livestream on Oct. 14, where CSIS and the Stanford Center on China’s Economy and Institutions (SCCEI) presented their latest "Big Data China" publication.
Participants reviewed data and discussed whether increasing imports from China impacted U.S. manufacturing employment, CSIS reports.
Professors Scott Rozelle of Stanford University, André Kurmann of Drexel University and Wang Zhi of George Mason University spoke about their research on the topic; panelists Anna Ashton of the Eurasia Group and Jeremie Waterman of the U.S. Chamber of Commerce discussed the implications for U.S.-China relations and U.S. policy, according to CSIS.
The Chamber's Waterman said there was a significant shock to the U.S. economy as a result of China's entry into the World Trade Organization, in terms of policy.
Firms that supply other U.S. firms that directly compete with imports would feel the negative employment effect of China trade, Wang Zhi, senior policy fellow of the Schar School of Policy & Government at George Mason University, said. But those U.S. firms that use intermediate goods from China would have a positive employment gain.
U.S. imports of these intermediate goods from China went from $14.8 billion in 2000, or 28.6% of total imports from China, up to $280.1 billion in 2021, with the share of total imports rising to 48.6%, he said.
He and his colleagues found no support that local U.S. labor markets had net job loss from China trade during 2000-2014. Their research showed 75% of workers benefit from importing from China, but the bottom 25% are made worse off.
The angst over China goes back to the 2016 presidential campaign with both candidates focused on it, Anna Ashton, director of China Corporate Affairs and U.S.-China for the Eurasia Group, said. Hillary Clinton said China engaged in underhanded trade practices that hurt America's middle class. Donald Trump said that China "raped" the United States.
“I think that remains the core issue driving a lot of American sentiment about China and as a result, also American policy,” she said.
As the China shock happened, a large reorganization of production and employment towards non-manufacturing occurred, André Kurmann, professor of Economics at LeBow College of Business, Drexel University, said. If those are related, is Chinese trade so damaging?
Kurmann cited Apple products designed in the U.S. and manufactured in China as an example of the idea that Chinese rises in manufacturing power enabled U.S. firms to enter new product markets to the overall benefit of the U.S.
Labor markets with a relatively educated population saw small manufacturing job losses. Half of those job losses came from plants shifting from manufacturing industries to non-manufacturing R&D and wholesale management. No significant effect was seen after 2010. Large non-manufacturing job gains also are seen in these labor markets.
“On the other hand, in local labor markets where education is relatively low, there are large manufacturing job losses, mainly plant shrinkage and closure,” Kurmann said.
The effects of China trade result in more affordable goods and a higher standard of living as a result, Ashton said. But in big pockets of the country, they watch their jobs go away. That translated into tensions in domestic politics between American working-class voters in the heartland and the coastal education elites.
“We really need solutions that fix economic development disparities between regions so that there’s not so much of a disparity in terms of an American’s odds of accessing competitive skills and gainful employment based on where they’re born,” Ashton said.
“I think everybody believes we need to do a better job with our educational system, particularly in the STEM area and training workers for the jobs of the future,” Waterman said.
