Abstract
Not only has the division of labor system in global value chains developed extensively between countries, but it also has spread into individual countries in the form of domestic value chains. This is particularly significant in the case of China that is vast in territory and rich in natural resources with great regional differences. This chapter creates a global input-output table that covers subregions, and on this basis, develops the breakdown method for value-added exports and total export value added, and offers an empirical analysis of the roles that different regions of China played in global value chains as well as changes in 1997, 2002 and 2007. Research findings show that: (1) Trade in value added varied widely from region to region in China. In traditional statistics on trade in gross value, trade surpluses of regions were overestimated, and there even were phenomena that some regions had a trade surplus in gross-value terms but a trade deficit in value-added terms. (2) The Chinese inland regions achieved the value-added export directly by offering intermediate products to the coastal regions. Traditional statistics on trade in gross value generally overrated the coastal regions and underrated the inland regions in terms of their contributions to foreign trade. (3) Following China’s accession to the WTO, regions all over the country had a fast-increasing degree of vertical specialization, with the coastal regions outperforming the inland ones in this respect. But there were different structural factors responsible for rising vertical specialization. For the inland regions, it was largely because of increased connection with other regions in terms of vertical specialization, and in the case of the coastal regions, it was with other countries in the world.
CLC Number: F74; Document Code: A; Article No.: 1002-8102 (2016) 10-0087-15
Funded study projects: “A Study of Paths and Strategies for Broadening the Opening-up of China’s Services Sector” (14ZDA084), The National Social Science Fund of China; “A Study of the Impact of Population Aging on Regional Economy: Based on a OLG-CGE Model” (71401009), National Natural Science Foundation of China; “Transfer of Industries between the Regions of China during Economic Transformation: Observations, Mechanisms and Policies” (71473054), National Natural Science Foundation of China.
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Notes
- 1.
For the convenience of expounding, this chapter refers to the value chains between regions within a country as “domestic value chains” and those between countries as “international value chains”. GVCs in this chapter is relatively broad concept, that is, including “domestic value chains” and “international value chains”.
- 2.
In different studies this is variably known as vertical specialization , production fragmentation, outsourcing, global supply chains and global value chains.
- 3.
Restricted by length requirements, the chapter did not give a detailed description of the tabulation method, which the authors may make available upon request.
- 4.
The WIOD project, which lasted three years (from May 2009 to April 2012) and involved 11 research organizations with 4 million euros in funding, covered 27 EU countries and 13 non-EU countries, involving 35 industrial sectors and 59 product sectors over the span 1995–2011. WIOD data is available at: http://www.wiod.org/database/index.htm.
- 5.
See Dietzenbacher et al. (2013). In the WIOTs, mainland China, Hong Kong and Macao together were treated as a whole.
- 6.
Meng et al. (2013) further developed the breakdown formula used by KWW (2014) regarding subregions and broke down value-added exports and DVA within a country (region) based on domestic value chains and international value chains (relations between countries in global value chains). Considering that from a country’s (region’s) point of view, the TiVA method is the same as the value-added exports calculation method in the KWW (2014) formula, Meng et al. (2013)’s breakdown method based on domestic and international value chains is consistent with this chapter’s breakdown method that starts directly with the TiVA formula.
- 7.
The inversion of a diagonal block matrix is also a diagonal block matrix
- 8.
The difference between BEE − BdEE, BEr − BdErand so on may be considered to be international feedback effects arising from domestic and international value chains. This chapter attributes the value-added exports and outflows thus caused to international value chain channels.
- 9.
So treated to keep consistent as much as possible with the VS definition of Hummels et al. (2001). WWZ (2013) defines VS as FVA plus repeated calculation items (items 13 and 16) in PDC in connection with foreign countries, that is, the sum of the 11th through 16th item in the 16-item breakdown formula.
- 10.
See WWZ (2013) for details about the 16-item breakdown formula.
- 11.
Trade data used in this chapter was generated through MATLAB programming based on TiVA calculation formulae. Detailed program codes and data are available on request.
- 12.
VAXR may be greater than 1. Circumstances where the value is greater than 1 are consistent with theoretical predictions, which however is a flaw of the indicator. WWZ (2013) noted that VAXR for a particular industry might not certainly be smaller than 1 and that a greater value than 1 for the industry was because the industry’s value added was a result not only of direct exports through the industry but of indirect exports through other industries. This chapter also found on a subregional level that VAXR for a particular region within a country might also be greater than 1, because the region’s value added came from not only direct exports through the region itself but also indirect exports by supplying intermediate products to other regions.
- 13.
Restricted by the length of this chapter, there are only listed the breakdown results of value-added exports and outflows of the regions without including results of their value-added exports to foreign countries. In addition, only data for the year 2007 is included. Data for 1997 and 2002 is available on request.
- 14.
This part of domestic value added was first exported to foreign countries but was also contained in imports from other countries and finally consumed domestically, known as RDV. RDV, though not part of value added exports of a country, is part of the country’s GDP hidden in exports.
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Ni, H., Xia, J. (2019). Roles of Chinese Regions in Global Value Chains and Their Changes. In: He, D., Wang, C. (eds) A New Era. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-10-8357-0_2
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