سرمایه گذاری مستقیم خارجی، حقوق مالکیت معنوی، و نابرابری دستمزد در چین
|کد مقاله||سال انتشار||تعداد صفحات مقاله انگلیسی||ترجمه فارسی|
|16813||2001||24 صفحه PDF||سفارش دهید|
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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : China Economic Review, Volume 11, Issue 4, Winter 2001, Pages 361–384
This article incorporates foreign direct investment (FDI) and product differentiation in a general equilibrium trade model. The analysis shows that freer trade and FDI will upgrade China's technology, improve its skills of labor, and increase the competitiveness of local firms in the international market. At the same time, the relative wage of skilled labor to unskilled labor will rise. The size of this rise will be affected by the degree of protection for intellectual property rights. These theoretical results are consistent with empirical evidence. The analysis provides insights in coordinating policies on FDI, labor market reform, and intellectual property rights protection.
Attracting foreign direct investment (FDI) has been a strategic economic policy adopted by China to upgrade technology and boost economic growth. FDI inflows into China have increased rapidly in the past three decades, especially into the 1990s. Since 1993, China has become the second largest FDI recipient after the United States (United Nations, 1999). Firms with FDI have contributed to over 40% of China's total trade since the mid-1990s. With China's imminent accession to the World Trade Organization (WTO), FDI will penetrate more of the Chinese economy. Notwithstanding the benefits FDI can bring, what potential risks can such influxes of FDI impose on the domestic economy? What policies can help a host country reduce such risks and maximize the benefits, especially with large FDI inflows as in China's case? Moran (1998) synthesizes evidence drawn from a wealth of case studies to assess policies toward FDI in developing countries and economies in transition. He finds that there is indeed a large and vital role for host country authorities to play in designing policies to manage FDI inflows, and that the needed actions differ substantially from conventional wisdom. This article will focus on the effect of FDI on China's relative wage of skilled and unskilled labor, and explore the policy implications for China's labor market reform. This is particularly important as access to the Chinese market by foreign trade and investment under the WTO rules can bring dramatic changes to China's employment and division of labor. The significance of the impact of FDI on China's relative wages may be concealed by the relatively small share of foreign-funded enterprises (FFEs) in China's total employment. But wages, like all the other prices, are set at the margin. FFEs can push up the wages even if their employment share is small.1 Indeed, multinational firms are found to have contributed to increasing inequality in income distribution in China. Zhang and Zheng (1998) show that the GINI coefficient of the per capita wages in industrial sectors almost doubled between 1985 and 1995. One of the culprits identified for this increase in income inequality is the entering of multinationals. Table 1 shows that the employment shares of the state-owned enterprises (SOEs) and collective-owned enterprises (COEs) in urban areas have declined, while that of the FFEs has increased since 1985. From 1985 to 1998, the average wage of the SOEs was, on average, 5% higher than the total average wage; that of the COEs was, on average, 23% lower; while that of the FFEs was, on average, 46% higher; as shown in Table 2. These data demonstrate that FFEs have been successfully expanding their market shares by using higher wages to attract labor from other domestic firms. Table 1. Number of staff and workers by ownership (10,000 persons) Source: China Statistical Yearbook 1986–1999 (State Statistical Bureau, 1986–1999). Year Total Urban Subtotal State-owned Urban collective-owned Foreign-fundeda Number % in urban Number % in urban Number % in urban 1985 49,873 12,808 8990 70.19 3324 25.95 6 0.05 1986 51,282 13,293 9333 70.21 3421 25.74 12 0.09 1987 52,783 13,783 9654 70.04 3488 25.31 21 0.15 1988 54,334 14,627 9984 68.26 3527 24.11 31 0.21 1989 55,329 14,390 10,108 70.24 3502 24.34 47 0.33 1990 63,909 16,616 10,346 62.27 3549 21.36 66 0.40 1991 64,799 16,977 10,664 62.81 3628 21.37 165 0.97 1992 65,554 17,241 10,889 63.16 3621 21.00 221 1.28 1993 66,373 17,589 10,920 62.08 3393 19.29 452 2.57 1994 67,199 18,413 11,214 60.90 3285 17.84 698 3.79 1995 67,947 19,093 11,261 58.98 3147 16.48 830 4.35 1996 68,850 19,815 11,244 56.74 3016 15.22 903 4.56 1997 69,600 20,207 11,044 54.65 2883 14.27 1049 5.19 1998 69,957 20,678 9058 43.81 1963 9.49 1481 7.16 a Including employments in firms funded by foreign entrepreneurs and by entrepreneurs from Hong Kong, Macao, and Taiwan, and share-holding firms by these entrepreneurs. Table options Table 2. Average wage of staff and workers by ownership (Yuan) Sources: China Statistical Yearbook 1986–1999 (State Statistical Bureau, 1986–1999). Year National average State-owned Collective-owned Foreign-fundeda Wage Δ to national (%) Wage Δ to national (%) Wage Δ to national (%) 1985 1148 1213 5.66 967 −15.77 1896 65.14 1986 1329 1414 6.40 1092 −17.83 1862 40.07 1987 1459 1546 5.96 1207 −17.27 2004 37.36 1988 1747 1853 6.07 1426 −18.37 2165 23.95 1989 1935 2055 6.20 1557 −19.53 2504 29.42 1990 2140 2284 6.73 1681 −21.45 2746 28.33 1991 2340 2477 5.85 1866 −20.26 5237 123.78 1992 2711 2878 6.16 2109 −22.21 4495 65.79 1993 3371 3532 4.78 2592 −23.11 5205 54.41 1994 4538 4797 5.71 3245 −28.49 6423 41.53 1995 5500 5625 2.27 3931 −28.53 7572 37.67 1996 6210 6280 1.13 4302 −30.72 8368 34.74 1997 6470 6747 4.28 4512 −30.26 8894 37.47 1998 7479 7668 2.53 5331 −28.72 9297 24.30 a Including wages in firms funded by foreign entrepreneurs and by entrepreneurs from Hong Kong, Macao, and Taiwan, and share-holding firms by these entrepreneurs. Average wages are higher for firms funded by foreign entrepreneurs only. Table options The relationship between the amount of FDI and the average wage in each sector is, however, not monotonic as illustrated in Fig. 1. This suggests that not all FDIs have the same effect on wages. To understand the variation, we can trace to the sources and patterns of China's FDI. Fig. 2 shows that most FDIs in the manufacturing sector from developing countries are relatively labor-intensive, while that from developed countries are relatively capital- or technology-intensive. Overall, developed countries invest mostly in technology- or human capital-intensive (high-tech) sectors, such as electronic and machinery, while developing countries invest mostly in labor-intensive (low-tech) sectors, such as food and textiles Chen, 1997a, Chen, 1997b and Zhang & Zheng, 1998. Full-size image (19 K) Fig. 1. Average nominal wage and share in total FDI by Sector 1998. Source: calculated from China Statistics Yearbook 1998 and 1999 (State Statistical Bureau, 1998–1999). Figure options Full-size image (27 K) Fig. 2. Sectoral composition of the largest FFEs in manufacturing by country group. Source: calculated from Huang, Xie, and Chen (1994). Figure options Given these differences, a question is whether FDI in different sectors has different impacts on the relative wage of skilled and unskilled labor. Since most FDIs in China are export-oriented, as FDI provides a channel for foreign firms to exploit China's cheaper labor input, the traditional Heckscher–Ohlin–Samuelson model predicts that, as FDI induces more trade, the relative wage of unskilled labor to skilled labor in China (with a relatively abundant unskilled labor endowment) will increase. However, Fig. 3 shows that the annual growth rate of real wages in those unskilled labor-intensive sectors are actually slower than the other skilled labor-intensive sectors with differentiated goods. Full-size image (9 K) Fig. 3. Annual growth of real average wage. Source: calculated from China Statistics Yearbook 1998 and 1999 (State Statistical Bureau). Figure options There has not been a completely satisfactory explanation on how FDI affects relative wages of skilled to unskilled labor. Feenstra & Hanson, 1997 and Feenstra and Hanson, 1999, Leamer, 1998 and Leamer, 2000, Krugman (2000), and Xu (2001) suggest that whether a factor- or sector-biased technical progress induced by FDI can change factor prices is ambiguous, depending on a country's size, and whether the technical progress is global or national. Sector bias matters as long as the technical progress is nonidentical across countries, and factor bias is all that matters for a large economy if the technical progress is global and identical and the preferences are Cobb–Douglas. As can be seen from Fig. 2, many FDIs in China are in differentiated sectors where quality, as well as quantity matters. Thus, this article extends the above analysis on the impact of technology on relative wages for homogeneous goods to study how FDI-induced technical progress can affect China's relative wages when there are product differentiation and when different quality varieties require different skill intensity of production. The article will then discuss the role of intellectual property rights on FDI's impact on relative wages, which has not received much attention in the literature. Other related studies will be discussed in the next section. In sum, this article develops a general equilibrium trade model with both horizontal and vertical product differentiation to demonstrate that FDI in differentiated sectors tends to increase the relative wage of skilled to unskilled labor rather than decrease it. This relative wage increase will be smaller if China enforces stricter protection of intellectual property rights. The theoretical findings from the model are used together with empirical evidence to analyze China's likely future relative wage changes, taking into consideration the technical progress included by FDIs in different sectors. Policy implications are drawn for the integration of policies on FDI, intellectual property rights, and labor market reform.
نتیجه گیری انگلیسی
This article develops a general equilibrium trade model and shows that the relative wage of skilled labor to unskilled labor in China will increase as China opens more market and attracts more FDI into high-tech sectors. This extends the standard Stolper–Samuelson theory with homogeneous products and technologies, which predicts that the relative wage of skilled labor to unskilled labor can only decrease in the absence of product differentiation. As more FDI flows into the Chinese economy, especially to sectors such as telecommunication, information technology, and banking and financial services, as included in China's recent WTO agreements with the US and EU, the gap between skilled and unskilled labor is likely to increase in the future. There is, however, no reason to fear the wage gap. Technology diffusion and quality upgrade increase the demand for skilled labor and change division of labor. As China integrates further into the global economy and moves from exporting labor-intensive to increasingly more skill/capital-intensive goods, this trend of relative wage increase of skilled labor is only to continue. It is important though that we understand the impact of FDI on wages, so that we can minimize the negative effect, and maximize the benefits associated with FDI. The theoretic results of this article demonstrate that FDI can upgrade technology, improve the skills of China's work force, enhance the product quality of local industries, and increase their competitiveness in international markets. China stands to gain from FDI inflows. But often, authorities offer more incentives to high-tech FDI in differentiated sectors, which will increase wage inequality between skilled and unskilled labor. One policy implication that can be drawn from the analysis in the article is that elimination of special treatment of FDI in those sectors will help reduce the negative impact on income distribution and provide a level playing ground for stable long-term FDI. Given the upward pressure on wages and the competition for labor brought about by FDI, it is also important to reform the labor market and wage system to empower domestic firms with more autonomy in hiring and firing workers and in setting wages, so that domestic firms are not disadvantaged in competition. Given the mounting unemployment problem, reforms of SOEs have been understandably cautious, especially with regard to labor and wage decisions. But delaying the reform process can only stall problems for the future. Experience of the private sector in recent years proves that market economy is the source of growth and employment. The analysis in this article also provides insights in the role of intellectual property rights protection on FDI and wage inequality. The results show that stricter intellectual property rights protection will deliver higher qualities for China's exports and hence lead to better terms of trade, and at the same time, will slow the rise of relative wages of skilled labor, and protect the welfare of unskilled labor. The trade-off is that stricter intellectual property rights protection is likely to expose domestic firms to more competition from FFEs and greater danger of losing market shares to FFEs. However, technology diffusion by FDI can also spur local firms to develop newer and better products. Strengthening the protection of intellectual property rights should clearly be an integral part of China's FDI policy.