Intermediate Goods Trade And Industrial Upgrading

With the development of information and communication technology and the significant reduction of tariffs,the degree of globalization is deepening,and a complex global production network has been formed.Intermediate goods have become the main part of trade.The proportion of intermediate goods in global trade has exceeded two thirds of total trade,and the proportion of China's trade in intermediate goods is also more than 50%.Apart from the favorable background of globalization,the rapid development of intermediate trade is rooted in the attributes of intermediate products,which are different from raw materials and final products that can be consumed directly.Intermediate goods represent the added value of input and output of factors of production in various countries,and act globally.The added value of industries varies from country to country.Developed countries generally have comparative advantages in technology-intensive industries,often engage in production activities with higher added value,and are at the top of the value chain.Developing countries generally have comparative advantages in natural resources and labor-intensive industries,often engage in low added value production activities and are at the low end of the value chain.Although China,as an emerging economy,has developed rapidly in recent years,it also faces the problem of low-end production in the global value chain.How to increase the added value of industry,upgrade the industry and improve the status of global value chain has become a difficult problem to be solved by China in the context of the new era of globalization.The main research objective of this paper is to explore the correlation between intermediate products and industrial added value,followed by suggestions for China's industrial upgrading.The research on the correlation between intermediate goods and industrial upgrading is carried out both theoretically and empirically.This paper constructs two theoretical models,the general equilibrium of imported intermediate goods and industrial correlation,which depicts the magnifying effect of intermediate products on industrial added value,and the extended EK model of exported intermediate goods.The empirical model uses logarithmic linear model,uses two-way fixed effect instrumental variable method to estimate,and carries out heterogeneity analysis and mechanism test.The study finds that intermediate trade can promote industrial upgrading,and the promotion effects are different according to different types of industries and countries.Empirical research finds that imported intermediate goods,domestic intermediate goods and exported intermediate goods can promote the increase of added value.Each industry has heterogeneity,and the influence coefficient of imported intermediate goods on the output value of labor-intensive manufacturing industry is the greatest;the promotion effect of exported intermediate goods on the output value of capital-intensive manufacturing industry is the strongest;and the promotion effect of domestic intermediate goods on health,education and public service industry is the greatest.Different countries have various impacts on income levels.Imported intermediate goods have the greatest impact on the industrial added value of middle and high income countries.Exported intermediate goods have the strongest impact on the industrial added value of low and middle income countries.Domestic intermediate goods have the greatest impact on high-income countries.From the three mechanisms of technology,material capital and human capital,the imported intermediate goods promote added value through material capital and human capital,and the exported intermediate goods and domestic intermediate goods promote added value through technology.China's industrial upgrading mainly analyses the current situation of China's intermediate trade and industrial upgrading,studies the impact of China's intermediate product trade on industrial upgrading,and then puts forward to corresponding policy recommendations.The scale of China's intermediate trade is expanding,and it has a strong industrial correlation in primary products and resource products,capital-intensive manufacturing and labor-intensive services,which will have a greater expansion effect.China's overall industrial added value is growing,while the domestic added value accounts for the main part of the total added value,and the domestic market is still the foundation of China's economy.The Empirical study on the impact of China's intermediate goods trade on industrial upgrading shows that China's imported intermediate goods have a significant impact on total added value,while the exported intermediate goods have no significant impact on all added value,and domestic intermediate goods have a significant impact on added value trade.China's imported intermediate goods conform to the general law,but the exported intermediate goods do not conform to the domestic intermediate goods.The main reason is that there is a large number of processing trades separated from the local industry.Therefore,China's industrial upgrading needs to continue to rely on the imported intermediate goods,constantly improve the competitiveness of domestic intermediate goods,and promote the formation of the linkage mechanism between domestic industry and export.On the basis,policy suggestions are put forward from the aspects of technological innovation,high-quality production factors,brand sales in high-end links of value chain,industrial clusters and so on.We should expand horizontally and vertically to encourage enterprises to take the initiative to destroy innovatively in order to improve technology;reverse contracting to build actively a global value chain;optimize the system and establish a "siphon" platform for global advanced production factors;enhance brand image,strengthen R&D design and channel innovation;and integrate resources to promote the development of industrial clusters.