The Impact of RCEP on Employment in China: A Social Accounting Matrix Approach

Abstract

The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement that will create the world’s largest trading bloc and marks a major milestone for China in international trade. This study examines the impact of RCEP on job creation across sectors in China, with a focus on skill and gender disparities. We employ a Social Accounting Matrix for China with 153 sectors and the latest employment satellite accounts to simulate RCEP as an exogenous shock and calculate employment multipliers. The results indicate that RCEP could create approximately 4,618,390 jobs in China, comprising about 1,915,496 jobs generated through import expansion and 2,702,894 through export growth. The largest potential employment gain is in the agricultural products sector. Male employment gains are about 2,801,178 jobs, compared to 1,817,212 jobs for females. Similarly, about 1,970,186 new jobs are expected for skilled labour and 2,648,204 for unskilled labour. These findings contribute to understanding the potential consequences of RCEP for China’s economy and labour market, and they offer insights for policymakers regarding sectoral opportunities and challenges.