Current legislation seeks to label China a “currency manipulator” due to its allegedly unfair trade practices. The coincidence of increased Sino-US trade flows with domestic job loss in manufacturing fuels a great deal of the growing anti-China sentiment in the US. Proponents of the Exchange Rate Oversight Reform Act attribute America’s long-experienced decline in manufacturing employment to competition from rising Chinese imports, therefore advocating protectionist measures. This thesis examines the validity of such claims, suggesting the possible significance of technologically-induced productivity gains rather than increased trade liberalization. Employing an ordinary least squares regression model, this study tests for the determinants of manufacturing job-loss between 1983 and 2005. Results of this study indicate the significance not only of increased imports from China, but from the entirety of the US’s low-wage trading partners. However, negligible significance is attributed to enhanced productivity during this period.
Includes bibliographical references.