An Analysis Of China’sTrade In Value Added And The Competitiveness In Global Value Chain

The international trade statistics have always been based on the principle of cross-border trade. With the rise of the trade of intermediate goods, the traditional way of statistics have shown significant limitations.In order to measure the true international trade situation, the "trade in value added" calculation method has gradually received national attention and recognition. It uses the input-output technology to decompose the added value generated by different nations.It can avoid some drawbacks such as the double countingof intermediate products in the traditional way oftrade statistics as long as reflecting the actual situation of a country’s trade comprehensively.At the same time, the deepening of economic globalization makes more and more countries participate in the international supply chain, relying on their own resources endowment. Competition between countries are not only built on the product level. Countries compete in the global value chain as well. Although countries take the opportunity of production chain to enter the global market, trade income and the level of competitiveness are quite different amongthese countries.In this paper, the model of Stehrer (2012) and WIOD data are used to estimate the trade in value added. of China between1995and2009. Furthermore, three indicators,GVC_Participation, GVC_Income and RCA_GVC are constructed on the basis of trade invalue added in order to measure the level of competitiveness in the global value chain quantitatively. By the model of Koopman et al.(2010) and the OECD-WTO data, we measure the extent of China’s participation in global value chain. By the modelof Timmer et al.(2013) and WIOD data, we calculate theglobal value chain incomeof40countries and the revealed comparative advantage in global value chainin China’s6manufacturingindustries.The main conclusions of this paper are as follows:1. The traditional way of trade statisticsoverestimate the real exports and exaggeratethe imbalance of trade. China’s export trade is distorted.The distorted degree is between20%and40%. And it is still increasing. 2. China’s competitiveness in the global value chain is on the rise. However, the competitiveness among6manufacturing industriesare not the same.The competitiveness of non-durable goods and equipment manufacturing industries are higher. The competitiveness of other manufacturing industries remain low.