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CEP discussion paper
Winners and Losers from a Commodities-for-Manufactures Trade Boom
Francisco Costa, Jason Garred and Joao Paulo Pessoa
May 2014
Paper No' CEPDP1269:
Full Paper (pdf)

JEL Classification: F14; F16; O17; Q17

Tags: china; trade; commodities-for manufactures; wages; employment; informality

A recent boom in commodities-for-manufactures trade between China and other developing countries has led to much concern about the losers from rising import competition in manufacturing, but little attention on the winners from growing Chinese demand for commodities. Using census data for Brazil, we find that local labour markets more affected by Chinese import competition experienced slower growth in manufacturing wages and in-migration rates between 2000 and 2010, and greater rises in local wage inequality. However, in locations benefiting from rising Chinese demand, we observe higher wage growth, lower takeup of cash transfers and positive effects on job quality.