The Drivers of Employment Manufacturing Growth

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.