The Effect of Offshore Outsourcing on China's Export Structure

Nankai University (Philosophy and Social Sciences) 3:20-28 (2006)
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Abstract

Index by building offshore outsourcing for various industries in China from 1997 to 2002 the status of offshore outsourcing and its impact on the export structure of study: the degree of participation in outsourcing, China's capital-intensive industries than labor-intensive industries developed countries tend to capital-intensive production process labor-intensive processes to China, so China's capital-intensive exports increased year by year the proportion of total exports, while the labor-intensive and resource-intensive products of export share decreased. In addition, empirical analysis, comparative advantage and economies of scale is the basis for offshore outsourcing, industry, labor-intensive and labor productivity index and other indicators of offshore outsourcing to a certain extent. These factors affect the way through the offshore outsourcing of China's export structure. By constructing an offshore outsourcing index and analyzing the outsourcing status in different industries as well as their effects on the export structure in China during 1997-2002, this paper indicates that capital-intensive industries in China accept more offshore outsourcing than labor-intensive industries, that developed countries incline to transfer the labour-intensive part in capital-intensive production to China, which makes China's capital-intensive products export increase steadily, while labor-intensive or resource-intensive products export is the reverse. The paper also makes an empirical study to the influential factors in China's offshore outsourcing receiving, of which the result proves that relative advantage and scaled economy are the important elements, whereas labor intensity and working efficiency also have impacts on outsourcing. All of these factors influence China's industry and export structure

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