Study On The Upgrading Of China’s Export Product Structure From The Perspective Of Vertical Specialization

As China’s economy transitioning from rapid growth to high-quality development,optimizing the structure of export products and enhancing the competitiveness of export products has become an important task to replace old growth drivers and build a trade power.As an important node of the international production network,China has been deeply integrated into the international division of labor system.While acquiring the capital,technology,and market demand brought by the vertical specialization,China’s capacity endowment,technical strength,and income from international division of labor have also achieved structural improvement.Under the background of vertical specialization,what is the essence and performance of China’s export product structure upgrading? How do the characteristics and development trends of China’s vertical specialization affect its export product structure? How can sub-sectors and firms enhance the product production capacity,improve the income from the international division of labor,and seek to promote export competitiveness? Exploring the above problems can provide ideas for the development of high-level international circulation and help to build a new development pattern.It can also offer some references for the accelerated reconstruction of the international division of labor system in the post-epidemic period,and help to promote China’s status in the global industrial chain.Starting from the above problems,this paper follows the research idea of “index measurement-fact analysis-theoretical analysis-empirical analysis”.For the index measurement of export product structure,this paper systematically combs the calculation methods of export product structure and analyzes China’s export product structure from the perspective of production capacity endowment,product technology structure,and income from the division of labor by calculating the density of product,the complexity of product and domestic value-added of export.On this basis,two composite indicators,the technical structure of product space and the international division status of manufacturing industry,are constructed.Thus,the evaluation system for the structure of export products has been formed.This paper investigates the characteristics of vertical specialization and trade in China based on the global value chain index system,the technical content of intermediate inputs in related industries,the transformation of product processing trade,and the switch of firms’ imported inputs.The fact analysis of China’s export product structure shows that China’s overall product density,economic complexity,and export domestic value-added rate have been increasing since 2000,and the export product structure has shown a trend of upgrading.However,the production capacity and comparative advantage of complex products in the core region of product space need to be established.The export sophistication of mid-high tech manufacturing is low,and the ability to gain benefits from the international division of labor is weak.The situation of ‘big but not strong’ has not been fundamentally improved.The fact analysis of the development of vertical specialization in China shows that China’s manufacturing industry is mainly embedded in the global value chains as a ‘value importer’.China is deeply participating in complex GVC production activities that cross borders at least twice,and the length of GVC production is higher than the global average.In the international production networks,Chinese manufacturing industries mostly face a situation that technical level of upstream inputs is higher than that of downstream inputs,showing a strong technical dependence on upstream inputs.By transforming the processing trade,the unbalanced development of regional distribution and business entity structure of processing trade has improved.As the ability of Chinese firms to allocate inputs from home and abroad improves,the switching behavior of imported intermediate goods is widespread among China’s import and export firms.More than half of the firms show a tendency variation of product factor intensity in the dynamic adjustment of imported inputs.From the theoretical level,this paper demonstrates the impacts and mechanisms of the above characteristics of vertical specialization exert on China’s export product structure upgrading.Analysis of the influence and mechanism at the macro industry-level shows that the enhancement of the participation and position in international division can promote the accumulation of China’s production capacity through product upgrading mechanism and value-added capacity mechanism,but the continuous extension of GVC production length reduces the value-added capacity of a single link in the international division.International production linkages characterized by intermediate trade promote the technological linkages between upstream and downstream industries.The improvement of technology level in related industries promotes the technological upgrading of Chinese manufacturing products through technology embedding and demand feedback.Analysis of the impact and mechanism at the micro product-level and firm-level shows that the transformation and upgrading of processing trade provide a supporting power for export upgrading by exerting the agglomeration economic effect of inland provinces and enhancing the dominance of local firms in product production mode.Changes in the types and factor intensity of imported inputs are conducive to the improvement of product innovation ability and structural transformation ability of firms,thus promoting the export upgrading of firms.Based on factual analysis and theoretical analysis,this paper makes full use of the data of the UN Comtrade Database,UIBE Database,WIOD Database,China Industrial Enterprise Database,and China Customs Import and Export Database for empirical research.The empirical study based on industry-level data verifies the product upgrading mechanism and value-added capacity mechanism of the division of global value chains,as well as the technology spillover effect of international production linkages.It is worth noting that the excessive fragmentation of the international division of production has a negative impact on the accumulation of production capacity endowments,and the high-tech intermediate input of upstream foreign countries has an inhibitory effect on the R&D investment of the downstream manufacturing industry,which is detrimental to the technological upgrading of manufacturing products.Empirical studies at the product level and firm level show that orderly undertaking the processing trade in inland provinces,promoting diversification of processing firms,and enhancing the ability of local firms to engage in the international division of labor are conducive to the upgrading of export product structure.Switching imported inputs significantly promotes the output of new products.The two-way change of factor intensity enhances the ability of structure transformation and helps to improve the export competitiveness of firms.Based on the single dimension index of export product structure,this paper expands the composite index of export product structure upgrading and forms an index evaluation system combining “quality” and “quantity”.This paper discusses the influence mechanism of vertical specialization and trade on the upgrading of export structure from the macro industry-level,and studies the realization path of the upgrading of export product structure under the condition of vertical specialization from the micro firm-level and product-level,to form the progressive and complementary research at the macro and micro level.In the micro level research,starting with the transformation of processing trade of HS6 quantile products and the import transformation of HS6 quantile intermediate products,this paper explores the path of upgrading the structure of export products through division of labor upgrading and input upgrading.It complements the existing research in terms of research perspective and sample range,and also provides a useful reference for the high-quality development of China’s trade.