The Research On The Economic Effects Of China's Participation In International Vertical Specialization

With the development of economic globalization and the evolution of international division of labor, Nowadays international vertical specialization has became the main form of international division of labor and trade. International vertical specialization which is based on global value chain and Characterized by diversifying production, depending on the differences of country or region in factor endowments, such as production technology, human capital, institutional factors, from the original basis of comparative advantage between countries division of labor division in-depth industry and product to process inside product, formats the international production of "fragmentation" and trade integration as the core of symbiosis new pattern of international division of labor. As a new form of international division of labor, international vertical specialization had a significant impact on the development of national and global economy, leading to sustained attention in the theoretical circles, and has become hot spot research in the field of international economic in recent years.Viewing from the existing literature, there have been numerous research studies for developed countries, while for developing countries, especially large developing countries such as China remains to be further studied. This thesis, based on the typical fact that China return to the world economy after 1978, judge the international status and compare China to the world in the system of international vertical specialization, describe the economic effects of China on the basis of international vertical specialization,through the theoretical and empirical research, and finally provide some policies.Based on trade data of the China and the world in-depth, by computing the Chinese degree of international vertical specialization, this chapter judges the position China in the international system of vertical specialization and competitiveness, and then compares the degree of Chinese vertical specialization to the United States'. The result shows that On the whole, China's overall level of vertical specialization has been at a higher level, many industries are turning from the most simple processing and assembly to the complexity of processing and assembly, and have a number of supporting parts production, high-end industries and products have been great development, and likely to have the breakthrough in high-end products and individual industries, while the low level of the industry is still relatively low, mid-tech industry's vertical specialization needs to be improved, and stage of development does not present a smooth volatility.Making technological progress as the research object, this chapter proves with the technology progress in developing countries by HK (2001) Model of three-stage game model of international vertical specialization and use non-parametric(DEA) to decompose the technological progress of Chinese industrial sector index, and make empirical research on China's industrial sector sub-sector panel data to examine international vertical specialization progress on effect of industrial technology in China, The results show that China's active participation in international vertical specialization helps promote their industrial technological progress and total factor productivity growth, the role of technological progress is greater than the extent of the role of total factor productivity, the impact on the technical efficiency is negative, in the previous studies there may be an underestimation of the impact of technological progress, After China's participation in international vertical specialization, the technology spillover effect is very obvious; also find that investment in research and development has a significant positive impact on technological progress, after adding vertical specialization by the cross terms, have significant synergies between the two, indicating that the absorptive capacity to improve their technical capacity and technical support can significantly improve the international vertical specialization of technology spillovers, promote technological progress.This chapter analysis from the international vertical specialization impact on income distribution mechanism of the gap between the two countries participation in international vertical specialization, the result shows that the partial transfer of the developed countries' production increase technical labor-intensive production activities, developing countries decrease by non-technical labor-intensive production activities, whether developed or developing, technology-based labor relative to unskilled labor will increase the yield, which means the income gap is widened. The level of quantitative analysis by China's industrial sector shows that the improvement of international vertical specialization in China did increase the skilled and the unskilled labor sector wage gap, the impact factor is very significant, which is consistent with the theoretical. We also find that technological progress, capital deepening of the industrial sector are also significant to expand income gap, indicating that China's industrial sector despite of the labor comparative advantage in international division of labor, but its meaning has been undergoing a rapid escalation process and the demand for technology-based staff is also growing.there are two reflected between trade and income gap of the industrial sector, exports will reduce the income gap of industry employees, while imports are contrary, and associate with the structure of China's exports and imports, exports of most products are based on labor-intensive, while imports are more and more biased with higher levels of equipment and technology products International vertical specialization on the one hand promotes the production of the "fragmentation" in the global scale of decentralized production; the other hand, gathers the "decentralized" production processes and similar procedures. This chapter establishes a dynamic panel data model and uses GMM estimation method to estimate the effect of the international production and factor endowments on the impact of China's industrial agglomeration two levels of general and regional based on the data of provinces in China from. The results show that the impact of international production division exists regional differences, its promotes the East and Central industrial concentration, prevents the Western's, and the impact in turn from strong to weak, factor endowments also play a different role.Through international vertical specialization on economic growth mechanism analysis, we find that the role of international vertical specialization on economic growth has three channels:technological spillovers, economies of scale and industrial upgrading.Then, the vertical specialization on international contribution to economic growth was estimated that international vertical specialization and trade on China's economic growth rate increases, and general trading pattern of the impact of economic growth gets weaker. Finally, by using the VAR model to analysis the dynamic relationship of economic growth and international vertical specialization and find that international vertical specialization and economic growth are co-integrated, compared with the normal trade patterns, international vertical specialization has stronger influence on the long-term economic growth more, impulse response also confirms that.Finally, the conclusions of this thesis were summarized, according to China's basic situation of factor endowments with national development strategies, we have a thought on how China can participate more effectively in international vertical specialization in the global system and get more bonus issues of division, and make recommendations.