The Relationship Between Capital Stock And The Low Position In The GVC Of Chain’s Manufacturing Sectors

Since1978, China with large, cheap labor resources gradually participates in the global value chain through technical cooperation and co-production. After thirty years of development, China has been able to produce and export a wide variety of manufactured goods, China’s industrial system has been basically established, China has also won the name of the "world factory". However, China’s manufacturing sectors mainly in the assembly, processing and other production processes and there is still a wide gap between the Western countries’enterprises and Chinese enterprises. In fact, in the process of global value chain China has become the "world assembly plant".In the global value chain China’s manufacturing enterprises mostly in processing, manufacturing, assembly and other production processes, characterized by labor-intensive input, low-margin, low level of technology, the high-margin value, high-tech production processes mostly are dominated or controlled by foreign enterprises in developed countries, resulting in "the economy rocketed growth" and "low-end in the GVC " coexist.This paper firstly examines the Chinese manufacturing sectors’position in the global value chain, most scholars agree that Chinese manufacturing sectors are at the lower position in the global value chain, but the conclusions are drawn generally by case studies or horizontal comparison method. The above methods can not intuitively excuse the degree of one sector to be locked and are difficult to compare laterally. To overcome that, we introduce the unit value of imports and exports of goods (UV value), which compared the Chinaese manufacturing sectors’position clearly in the global value chain.Secondly, this paper tries to find out why our manufacturing enterprises in the value chain go into the low position in the global value chain. This paper argues that the unfavorable factor endowments or Chinese manufacturing sectors’capital factors are not rich, this lead to Chinese manufacturing sectors go into the low position in the GVC. This paper argues that the participation in the global value chain does help to improve the productivity of the manufacturing sectors in our country, but the improvement in the productivity of the manufacturing sectors is limited, this does not achieve the purpose of upgrading in the global value chain. Then spillover effect of technology among the participation in the global value chain will be replaced by the disadvantage of low-end positions in global value chain. Upgrades in the value chain occur when the accumulation in the capital and knowledge to a certain extent, this can’t be obtained by the import of advanced machinery and equipment from abroad. The gap between our manufacturing enterprises and developed country’s enterprises will not be able to shorten if our enterprises can not rely on our own capital accumulation and technological innovation. Then the upgrading will be never achievement.This paper use economic data to verify the above observations, firstly we apply Granger causality test to analyze the relationship between Capital and the low position in the value chain. The results indicate that the capital is lead to the state of the low position in the value chain. Secondly we investigate capital factor, low position in value chain how to affect the productivity, respectively. The results show that the accumulation of capital factors is conducive to enhancing productivity significantly, and the low position in value chain is not conducive to enhancing productivity.Therefore, to achieve the upgrading of our manufacturing enterprises we must strengthen the accumulation of capital factors and the government should play a role in guiding enterprises in terms of high-level factors’accumulation.