The Research On China-ASEAN Industrial Chain Cooperation From The Perspective Of Value Added

Nowadays profound changes unseen in a century are evolving rapidly,the waves of trade protectionism,“high-end reshoring” and “low-end transfer” speeding up the restructuring of global industrial chains towards regionalization and localization.This poses serious challenges to China’s industrial and value chain upgrading,and supply chain security.Firstly,since the onset of reform and opening up,China has actively integrated into the global industrial chains with its advantage in low-cost labor.Although it has achieved sustained growth in foreign trade and the economy,it has been “vertically squeezed” and locked into low-end segments.With the rise of trade protectionism,China’s core components and critical technologies face the risk of being constrained,leading to a dilemma of insufficient strength in high-end manufacturing and not low enough costs in low-end manufacturing.Developing countries in ASEAN are also following the path of China’s order-based processing trade,can only gain relatively low value-added income,and are prone to path dependence and low-end lock-in.Secondly,the issues of marginalization,path dependence,and low-end lock-in that developing countries face in the global industrial chain reflect their prominent dilemmas of “unequal opportunities” and “unequal status”.Promoting a more equal division of labor and a more equal status has become a common aspiration for many developing countries to participate in industrial chain cooperation.Thirdly,developed countries,led by the United States,have initiated trade frictions with China,and the waves of “high-end reshoring” and “low-end transfer” have accelerated multinational companies’ realignment around the world.With the impact of events like COVID-19 pandemic and Russia-Ukraine conflict,the global division of labor in industrial chains faces the risk of disruption,posing a severe test to China’s industrial chain and supply chain security.The Fifth Plenary Session of the19 th Central Committee of the Communist Party of China(CPC)for the first time incorporated coordinating development and security into the guiding ideology of China’s economic and social development during the “14th Five-Year Plan” period.This emphasizes the promotion of overall national security while enhancing economic development efficiency,and advocates the construction of a comprehensive security framework.Currently,the construction of the China-ASEAN economic and trade cooperation mechanism has made breakthrough progress,and the level of China-ASEAN economic and trade cooperation has continued to improve since the establishment of their dialogue relationship in 1991.In 2020,ASEAN became China’s largest trading partner,and China has maintained its position as ASEAN’s largest trading partner for 12 consecutive years.By 2022,the bilateral trade had increased by 121.5 times compared to 1991,and ASEAN accounted for 15.5% of China’s foreign trade.There continues to show strong growth momentum between China and ASEAN,which expand cooperation in various fields such as manufacturing,agriculture,infrastructure,high-tech,digital economy and green economy.Meanwhile,with the release of consumption markets in developing countries and the development of labor markets on the supply side,the economic growth of developing countries has become an important driving force for global economic development.Therefore,key issues are urgently need to be addressed,including addressing the new requirements of China-ASEAN industrial chain cooperation,achieving dual cross-regional coordination of final consumption markets and industrial clusters,promoting broader market and production capacity cooperation,breaking through the low-end lock-in dilemma of China and ASEAN in the global industrial chain,fostering a more equitable distribution of development opportunities and division of labor,and ensuring the stability and security of the industrial chain.Therefore,this paper focuses on the core research content of China-ASEAN industrial chain cooperation and promotion from the perspective of value-added.Following the research paradigm of “raising questions — analyzing questions —solving questions”,the paper is conducted as follows: Firstly,based on a systematic review of relevant literature,it analyzes the development trends of China-ASEAN industrial chain cooperation from the perspective of value-added,presenting the division of labor,key cooperation areas,cooperation modes,and status of China-ASEAN industrial chains.Secondly,it provides a connotative definition of key concepts such as value-added and China-ASEAN industrial chain cooperation,systematically reviews the relevant theoretical foundations from the perspective of value-added in China-ASEAN industrial chain cooperation,and proposes a three-dimensional integrated theoretical analysis framework of “efficiency—fairness— security”,discussing the three effects of China-ASEAN industrial chain cooperation from the perspective of value-added,and how to further promote China-ASEAN industrial chain cooperation through deepening regional trade agreements(RTA).This lays the theoretical analysis foundation for the empirical section that follows.Thirdly,it conducts empirical analysis on the effectiveness and promotion mechanisms of China-ASEAN industrial chain cooperation from the perspective of value-added.It analyzes the effectiveness of China-ASEAN industrial chain cooperation from three dimensions: technological upgrading effect(“efficiency”),inclusive growth effect(“fairness”),and security effect(“security”),and the impact of the depth of RTAs on China-ASEAN industrial chain cooperation.Based on the theoretical framework and empirical analysis presented in this paper,the main conclusions are as follows:First,from the perspective of the value-added network in China-ASEAN trade,the industrial linkages among economies have continuously strengthened from 1995 to 2021.The industrial chain pattern shifted in the 20 years after China’s accession to the WTO in 2002,evolving from a structure with Taiwan Province of China as the “hub” and Chinese mainland as the “sub-hub”,to a new pattern in 2021 with Chinese mainland as the “hub” and Taiwan Province of China as the “sub-hub”.Chinese mainland has become a significant provider and demander of value-added within the region.Regarding the bilateral trade in value-added within the China-ASEAN industrial chain,there are variations in the scale and key areas of cooperation between Chinese mainland and other economies.In terms of cooperation patterns and status within the China-ASEAN industrial chain,the cooperation has become increasingly close,with cooperation intensity far exceeding the world average.Compared to participation in the global industrial chain,nearly all economies have more opportunities to participate in upstream segments within the China-ASEAN industrial chain,allowing them to gain higher value-added returns and control ability.Second,the technological upgrading effect of China-ASEAN industrial chain cooperation surpasses that of cooperation outside the region.Economies participating in China-ASEAN industrial chain cooperation exhibit a significant technological upgrading effect,whereas participating in industrial chain cooperation outside the region does not.This holds true even when examining heterogeneities such as different industries and income levels.However,there were no significant upgrading effects observed for medium and high-tech manufacturing industries in China-ASEAN industrial chain cooperation.This implies that China should focus on building domestic industrial chains and achieving endogenous breakthroughs.Quantile regression results indicate that the strength of an economy’s industrial competitiveness is a crucial factor in determining the strength of upgrading effect.Further research indicates that there is a step-by-step technology spillover effect in the China-ASEAN industrial chain cooperation,moving from high-income economies to upper-middle-income economies,and then to lower-middle-income economies.This technology spillover effect can effectively prevents economies from being locked into low-end positions and facilitates technological upgrades.The enormous consumer market within China-ASEAN region provides strong demand-side impetus for economies to elevate their technological levels.Third,the inclusive growth effect of China-ASEAN industrial chain cooperation is superior to that outside the region.Economies participating in China-ASEAN industrial chain cooperation can effectively promote inclusive growth in terms of efficiency and fairness,whereas participating in industrial chain cooperation outside the region does not.The increase in total factor productivity and employment demand are two influencing channels of the efficiency-based inclusive growth resulting from the participation level in the China-ASEAN industrial chain.Meanwhile,convergence in institutional quality and technological gap are two channels affecting fairness-based inclusive growth resulting from the participation level in the China-ASEAN industrial chain.Additionally,the moderating effect of RTAs mainly manifests in the “quantity” rather than the “quality” dimension,where the increased number of effective RTAs reinforces the inclusive growth effect of China-ASEAN industrial chain cooperation in both dimensions.Fourth,the security effect of China-ASEAN industrial chain cooperation is also superior to cooperation outside the region.When considering only the economic dimension,participation in China-ASEAN industrial chain cooperation and cooperation outside the region both reduce the degree of supply chain security.However,when examining the economic and political dimensions comprehensively,participation in China-ASEAN industrial chain cooperation significantly reduces supply chain risks,while participation in cooperation outside the region does not.In terms of industry heterogeneity,the security effect in China-ASEAN industrial chain cooperation is superior in all industries compared to that outside the region.High-tech industries face greater supply chain risks in cooperation outside the region compared to medium-to-low-tech industries.Further research indicates that supply chain risks in cross-border industrial chain cooperation primarily stem from production risks rather than sales risks.Under the economic-political dual dimension,economies participating in China-ASEAN industrial chain cooperation primarily reduce their reliance on external intermediate production and sales,thereby lowering production and sales risks,which enhance supply chain security.In contrast,economies participating in cooperation outside the region significantly increase their reliance on external production of intermediate goods,thereby increasing production risks and reducing supply chain security.Fifth,given that the overall effectiveness of China-ASEAN industrial chain cooperation is superior to that outside the region,Chapter 8 explores how to further promote China-ASEAN industrial chain cooperation in the future.Both domestic and international research indicate that the depth of RTAs is an essential means for countries to advance industrial chain cooperation.It’s also a key measure for countries to actively integrate into cross-border industrial chain,so as to gain more benefits.Therefore,Chapter 8 focuses on investigating the impact of RTAs’ depth on China-ASEAN industrial chain cooperation.The results show that the depth of RTAs signed within the China-ASEAN region has a significant promoting effect on industrial chain cooperation.The deeper the content of RTAs,the more substantial the promoting effect on China-ASEAN industrial chain cooperation.With the increasing depth of RTAs,the mode of China-ASEAN industrial chain cooperation is shifting from direct cooperation to indirect cooperation,and from simple cooperation to complex cooperation.Trade cost effects,import learning and innovation effects,and institutional environment improvement effects are the three channels through which the depth of RTAs promotes China-ASEAN industrial chain cooperation.This paper introduces several potential innovations: Firstly,in terms of research perspective,it adopts an “value-added perspective” to study China-ASEAN industrial chain cooperation.Existing research has primarily explored East Asia and“the Belt and Road” industrial chain cooperation from the angle of trade or direct investment to promote industrial chain upgrades.There has been limited research on China-ASEAN industrial chain cooperation from a value-added perspective.This paper combines the new features and trends in global industrial chain division of labor,utilizes value-added trade accounting methods,and focuses on the trade facts between China and ASEAN.It narrows down the research scope to China-ASEAN industrial chain cooperation.By establishing quantitative indicators from a value-added perspective,this approach provides necessary empirical material for a more accurate understanding of the reality and effectiveness of China-ASEAN industrial chain cooperation.Secondly,in terms of research content,it constructs a theoretical analytical framework integrating “efficiency —fairness —security” and employs a research method that combines theoretical with empirical analysis to comprehensively assess the effectiveness of China-ASEAN industrial chain cooperation.In the context of rising economic nationalism and the contraction of global industrial chains,this paper takes inspiration from the theories and practices of opening-up promoted by the Central Committee of the Communist Party of China with Comrade Xi Jinping at its core,which focus on the concept of global governance based on consultation,contribution,and shared benefits.It adopts a research method that combines theory with empirical analysis,and builds a theoretical analytical framework encompassing “efficiency—fairness—security”.By examining the effectiveness of China-ASEAN industrial chain cooperation from multiple dimensions,it avoids the limitations of purely qualitative theory,single-dimensional perspectives,or one-sided analyses focused solely on China.Thirdly,in terms of research methods,it establishes a China-ASEAN industrial chain cooperation index system.While many domestic and international scholars have conducted extensive empirical research on Asian industrial chains or regional value chains,most measurements of Asian industrial chains use global value chain indicators as substitutes.These indicators often suffer from unclear definitions and boundary overlaps.Furthermore,qualitative analyses of the inclusiveness and risks faced by cross-border industrial chains are prevalent,but quantitative research on the“fairness” and “security” levels of China-ASEAN industrial chains is scarce.Based on the world input-output database and value-added trade accounting methods,this paper systematically construct an index system for cross-border industrial chain cooperation from a value-added perspective.It quantitatively studies the cooperation degree,cooperation patterns,cooperation status,“fairness” levels,“security” levels,and other aspects of China-ASEAN industrial chains.In the context of the restructuring of global industrial chains,this approach enables a comprehensive evaluation of the changes and effectiveness of China-ASEAN industrial chains across the “efficiency”,“fairness”,and “security” dimensions.