The Impact Of Specific Factors About China’s "Trade In Value-added"

With the integration into Global value chains (GVC), China has become the world’sbiggest exporter, but China’s exportation contains many other countries’ intermediategoods’ value. The production process in Global value chains is divided into differentproduct sectors and completed among different countries. Statistics on international tradeflows are measured in gross terms and, hence, record the value of intermediate inputstraded along the value chain multiple times, inflated the country’s total exportation in theend of the GVC. Trade in value-added (TIVA) also increases with the total exportationincreasing, but the proportion in exports has decreased year by year, the ratio is lower thanChina’s major trade partners. Trade in value-added is not only represent a national realexport capacity and international competitiveness, but also related to the division of acountry in the GVC. In order to better improve TIVA, we must study the impact of specificfactors and mechanisms that increase the value of domestic exports, thereby guiding thedevelopment of rational policies based on appropriate factors.This paper studies needed to obtain basic data from the database of WTO, OECD, andthe National Bureau of Statistics website. Firstly, the paper analyzes the current situation ofthe TIVA and makes a comparative analysis of China’s major trade partners, from themacroeconomic level to observe its influence factors; Then, using Hummels’ input-outputmethod estimates the TIVA of China’s export trade in the period1995-2011, and throughcomparative analysis of the TIVA in35industries to do further research; Finally, the paneldata model carried out empirical research on TIVA from five factors: the size of theindustry, R&D investment, labor compensation, foreign capital and energy use, then madethe following conclusions:1、China’s total value of TIVA with increased export trade expansion and rapid growthbut its share in exports is declining, the current ratio is lower than China’s major tradepartners. 2、The size of the industry growth rate, labor compensation, R&D investment hasobvious positive role in promoting for the increase of the TIVA. But the promoting effectof industry scale growth is restricted by the economies of scale. Labor qualityimprovement and R&D investment is the driving force for sustainable endogenousincrease the value of domestic exports.3、Foreign capital and energy use have a smaller impact degree on TIVA. The twoelements are conducive to promoting the growth of the total size of the export trade, butthe direct investment of foreign capital and energy use cannot effectively improve theTIVA and vulnerable to external conditions.Finally, countermeasures and suggestions are proposed to enhance Trade invalue-added from the empirical conclusions.