The latest threat from the rise of Chinese manufacturing

If all this seems clear in the past, then this is only because the research by David Outor, an economist at the Massachusetts Institute of Technology, and his colleagues are acceptable, although it is often a distorted political narration these days: China destroyed all our manufacturing functions! Although the nuances of research are often ignored, the results help to explain at least some current political turmoil. It is reflected in the increasing calls to American protectionism, the extensive definitions of president Trump on imported goods, and nostalgia to the lost days of the glory of local manufacturing.

The effects of the original China shock are still the scar. But Autor is now concerned about what it considers a more urgent problem – what some call China Shock 2.0. The United States warns not to lose the next wonderful manufacturing battle, this time on the advanced technologies for making cars and aircraft as well as those that allow artificial intelligence, quantum computing and integration energy.

Recently, I asked Autor about the ongoing effects of China’s shock and the lessons it maintains for manufacturing challenges today.

How are China shocking effects still playing?

I have a modern paper looking at 20 years of data, from 2000 to 2019. We tried to ask two related questions. One, if you look at the places that were exposed more, how did you change them? Then if you look at the most exposed people, how to modify them? And how are these two things related to another?

It turns out that you are getting two very different answers. If you look at the places that have been exposed to more, they have been transferred significantly. Manufacturing, as soon as the descent begins, never returns. But after 2010, the local labor markets that the trade affects organized something from the recovery of employment, so that the employment grew faster after 2010 in places exposed to trade from the places that are not exposed because many people have entered. But these functions are mostly in low -wage sectors. They are in K-12 education and non-circulating health services. They are in warehouses and logistics. They are in hospitality, housing and entertainment, and therefore they are functions of less unpopular wages. They did a different group of people.

The growth in work is among women, among the Spanish -born origins, among adults born abroad and many young people. Recovery is strengthened by a completely different group of white and black men, especially white men, who were more active in manufacturing. They did not really participate in the Renaissance.

Employment grows, but do these areas flourish?