Global Value Chain Division Of Labor, Export Product Structure And Trade Benefits

With the deepening of international division of labor, commodity value chain is divided into research and development, design, raw materials and spare parts production, finished product assembly, logistics, marketing and after-sales service and so on a number of independent link, Multinational companies local each link in the countries and regions where the product-link can be done at the lowest cost, thus the international division of labor is known as the division of global value chain.Under the division of global value chain, the participating countries undertake some process or product value chain link instead of the entire production. To a large extent, the participating countries produce and export value chain link, share trade benefits according to the contribution of its links to product value-added. So it’s important and meaningful to study the current international division of labor and trade income problem base on the angle of value-added.As to the basis or motivation of international division of labor, most of the mainstream literatures refer to the theory of comparative advantage or factor endowments, which based on the angle of the relative cost differences, but it can also be made a good explanation from the perspective of value-added. Through the analysis of the relative productivity difference of the participating countries influence to the international division of labor, we can find relative production efficiency principle i.e., relative production efficiency difference is one of the important factors affecting international trade and division of labor, a country tends to export products with high relative production efficiency.GVC-Position and the export product structure is one of the frontiers and focuses in the field of international trade research. From the perspective of value-added, GVC-Position reflects the domestic value-added contribution of export products. Through the theory and empirical analysis of global value chain, we can find the influential factors of GVC-Position mainly include the factor endowment structure, the level of domestic production and export market share.Based on the perspective of value-added, according to the domestic value-added content of export products, A country(region) of export products can be divided into two categories: comparative advantage and comparative disadvantage products. By building export optimization degree index(EO index),We can measure and compare the export structure of industry as well as the country(region). By accounting the structure of export in mainly exported countries, We can find the industrial value chain division of labor in the regional trade group represented by industries such as Electrical and Optical Equipment. Compared with other manufacturing department, the EO index of China’s Transport Equipment is relatively high. In the global value chain division of labor,Most of the EO index of Japan and US is relatively high, While China’s export products structure and the first export superpower status is not matched.Under the global value chain, the traditional trade accounting system can’t reflect objectively the trade gains of countries because there are a large number of intermediate goods trade and factor mobility. The statistical methods of value-added can effective accounting out trade benefits of a country(region) or industrial. Territory-based gains from trade refer to the sum of gains acquired from the participation of all factors within the territory of a country or region(including domestic factors and inflow factors) in international trade and division of labor.Through the empirical analysis of China’s trade gains from global value chain and the Territory-based trade gains from bilateral trade, we can find behind China’s status as the largest goods exporting country in the world, most of Chinese exports contribute to the gains of foreign countries. Under the traditional trade statistics system, China’s export of goods trade surplus to the United States is significantly overvalued, and the export of service trade surplus was significantly undervalued. US take the relatively advantageous position in the Sino-US bilateral trade income distribution.Through the theorical and empirical analysis of the influence factors of Territory-based trade gains, we can find Territory-based trade gains in global value chain mainly depends on its structure of exports, GVC-Position and GVC-Participation of export products.In order to avoid the influence of mobile factor, it is necessary to study from the perspective of ownership-based gains from trade, especially for China. Ownership-based gains from trade are the remainder of trade in value added after the exclusion of foreign inflow factors, i.e., value addition created by local factors. Advanced inflow factors of production contributes significantly to the GVC-Position of Chinese export products and the optimization of the export product structure. So "made in China" which not excluding the contribution of foreign inflow factors do not objectively reflect the reality of the China’s export competitiveness.In terms of trade gains, China’s trade gains is significantly overestimated including foreign inflow factors’ contribution. Ownership-based gains from trade for the proportion of total exports accounted less than half. So the statistics based on Territory-based trade gains can not objectively reflect China’s trade gains in the international division of labor. Export products structure optimization, GVC-Position promotion(especially comparative disadvantage products), to improve China’s Ownership-based gains from trade. While the GVC-participation,(especially comparative disadvantage products), will be adversely affected to China’s Ownership-based gains from trade.Chinese open economy has completed phase of join the global value chain, should speed up into the phase of ascension the global value chain. So speeding up the optimization of export product structure, improving trade gains will be the main task of this stage. In order to improve the trade gains of GVC, we should further change ideas and put more emphasis on trade growth of endogenous; further cultivate the advanced factors of production, speed up the factor endowment structure upgrade; further enhance GVC-Position, optimize the structure of export products; further strengthen the ability of domestic productivity, strengthen trade association to the growth of industry.