The impact of regional comprehensive economic partnership (RCEP) on employment in China / Wu Xinxiong

• Main Author: Wu , Xinxiong
• Format: Thesis
• Published: 2023
• Subjects: HC Economic History and Conditions; HD Industries. Land use. Labor
• Online Access: http://studentsrepo.um.edu.my/15252/2/Wu_Xinxiong.pdf; http://studentsrepo.um.edu.my/15252/1/Wu_Xinxiong.pdf; http://studentsrepo.um.edu.my/15252/

The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement (FTA) that will create the world’s largest trading bloc and mark a major achievement for China in terms of free international trade. The significant contribution of international trade to employment growth is a constant concern of the labour force, governments, and the World Trade Organisation. The entry into force of the RCEP may have a positive or negative impact on potential employment opportunities in several sectors in China, given whether the RCEP contributes to sectoral potential employment opportunities through trade. This study examines the impact of the RCEP on the number of potential employment opportunities that may be created in various sectors in China, and to examine skill disparities and gender disparities in sectoral potential employment opportunities. The Social Accounting Matrix (SAM) is a consistent square accounting framework that represents the entire economy of a country or region over a defined period, usually one year. It provides a static picture of the economy and can be used as a source of data for various models to assess the impact of shocks or interventions. The latest version of the SAM for China in 2020 includes 153 sectors, which can be used to simulate the impact of RCEP on China as an exogenous variable. In an original social accounting matrix in monetary terms, the employment satellite account is a necessary tool if we want to study the impact of shocks on employment. This study compiles the latest employment satellite accounts based on the latest version of China’s Seventh Population Census to calculate the employment multiplier, which indicates the impact of RCEP as an exogenous shock on employment, i.e. the number of potential employment opportunities created or destroyed. The study found that the RCEP is expected to create 4618,390 potential employment opportunities in China, of which 1915,496 and 270,2894 will be created in China through imports and exports respectively. The largest potential employment opportunities are concentrated in the agricultural products sector, with 1,856,723. The RCEP is expected to create 2,801,178 and 1817212 potential employment opportunities for males and females respectively in China. The RCEP is expected to create 197,0186 sectoral potential employment opportunities for the skilled labour and 2,648,204 for the unskilled labour. This study offers some suggestions and implications to address the gender and skills gap that may exist in the RCEP’s potential employment opportunities in China. Firstly, more active trade policies should be pursued, including reducing trade barriers, providing preferential treatment for imports from RCEP member countries, and supporting the internationalization of small and medium-sized enterprises. Secondly, gender differences in potential employment opportunities should be eliminated by enacting laws against discrimination, increasing support for women’s vocational training and education, encouraging women’s entrepreneurship, assuming childbirth costs, and promoting active caregiving roles for men. Lastly, skill differences can be addressed through increased investment in skills training and education, promoting technological cooperation and transfer, facilitating labor force mobility among RCEP member countries, establishing industry skill standards and certification systems, and aligning school education with industry demands.