The Trade Characteristics Of China In Global Value Chain

Along with the acceleration and deepening of economic globalization, the degree of China’s participation in the global value chain is rising. However, in the international division of labor, China is still mainly engaged in low value-added links like processing and assembling, while high value-added links like design, research and development are still remain in the hands of developed countries. As we know, a country’s export products include both domestic value-added and the import of intermediate products from other countries, but according to the traditional trade statistics, the entire value of the export products is credited to the trade balance account of the processing and assembling countries, thus distorting the trade balance of developing countries like China where processing trade is popular. The foreign trade, trade features in the global value chain, and the real trade benefits of a country cannot be reflected.This paper uses TiVA, the database of global trade in value-added jointly launched by OECD and WTO, to analyse China’s general situation in foreign trade under the statistics of trade in value-added. This reveals China’s real situation in foreign trade. The study finds that the amount of exports and trade balance according to trade in value-added statistics and that according to total trade statistics have quite big difference. China’s real exports and trade surplus with developed countries like the United States and countries of European Union are greatly exaggerated.On this basis, this paper introduces the trade in value-added into the research of global value chain, to analyses China’s trade features from the added value level, the participation and position in the global value chain, comparative advantage, and other aspects. The study finds that China’s participation in the global value chain level is very high. The position and the value-added level in the global value chain has improved in recent years, but still far behind the United States, Japan and other developed countries. By the sectors perspective, China’s manufacturing exports accounted for the proportion of total exports shows a rising trend while the service sector exports shows a declining trend. China’s service industry has higher value-added level, but the international competitiveness decreases significantly. The United States is showing the opposite trend of development. At the same time, this paper also finds that the low value-added level in the manufacturing industry, especially for high-end technology manufacturing, is the main reason for China’s whole low value-added level. Electronic and optical instrument manufacturing industry, which takes up for four tenths of exports, has a very high participation in the global value chain, significantly increasing proportion of added value in total exports these years and certain international competitiveness depend on the size of the export, but the position in the global value chain is very low, with added value level far behind in other industries.