Abstract: Co-agglomeration of industries has become a national industries policy in China and also has important effects on employment. The paper theoretically analyzes the effect of co-agglomeration of producer services and manufacturing on regional employment and inter-regional employment,and empirically examine the effects by using Chinese 31 provincial panel data. The key results are as follows:(1) Agglomeration of producer services not only significantly promote the regional total employment, but also promote the job growth in regional manufacturing and producer services respectively.(2) Agglomeration of manufacturing significantly promote the job growth in regional manufacturing,but significantly diminish the job growth in regional producer services.(3) Co-agglomeration of producer services and manufacturing in certain province significantly diminish the regional total employment.(4) Co-agglomeration of producer services and manufacturing between provinces significantly promote the intra-provincial job growth of manufacturing and producer services,and also the regional total employment.

Key words: Producer Services, Co-agglomeration, Employment Effect, Crowding out Effect, Complementary Effect