Research On China’s Direct Trade Interests From The Perspective Of Global Value Chains Specialization

The 21st century is the era of economic boom and the world is closely interconnected. As an economic giant, China is playing more and more important role in the world. International Trade is irreplaceable for the growth of China’s GDP. However, compared to the huge trade volume and higher trade growth annually, China’s GDP growth rate is much smaller than the former. Trade surplus is durative, especially that in bilateral trade with the United States. There are increasing trade frictions, but the profit margins of China’s export enterprises are small. Under the division of GVC, processing trade is the main way of China to join into the global value chain. It is characterized by low-skilled, high-energy-consuming and labor-intensive processing and manufacturing sectors, which is low value-added. It is difficult for China to obtain direct trade interests by passive participation in global production.This paper is mainly based on Marx’s labor theory of value and the theory of international value, as the theoretical basis to analyze the source of international interests. Combining with the market structure and the external environment (such as,the international economic institution and the ecological environment change), the three above together are utilized to explore the allocation of direct trade interests in GVC. Trade value-added refers to the added value of a product, achieved through post-production processing in one country. It can be used to calculate the direct trade interests.Labor creates new value.The most fundamental source of trade benefits is surplus value. International value is the basis for international trade exchange. Under the GVC specialization, the product’s final value is the sum of all sections of the intermediate product’s international value.That is the weighted average of the socially necessary labor time required to produce the same part of all individual countries or regions involving in GVC. As national production conditions and labor productivity are different, it will lead to the transfer of surplus value from less developed countries to developed countries in international exchange, according to international value. This way of exchange is unequal despite it is equivalent.Leading countries or companies in GVC tend to utilize the most appropriate way to control the entire value chain. It is that one’s position in the value chain, its control force over the market as well as the impact of the international economic system can decide the distribution of direct trade benefits after participating in the international division. The processing with high energy consumption and high pollution has sacrificed the environment, resulting in a national social welfare loss.This article considered Labor productivity, market forces, the international economic institution and ecological environment deficit as the four main factors of direct trade deficit. And accordingly, four economic variables were selected:Higher education enrollments, fixed capital formation rate, trade competition index and manufacturing energy consumption. Those are uesd to do the quantitative analysis and empirical test for the trade value-added. It concluded that the four factors all affected trade value-added. And the former three had positive correlation with trade value-added. Contrarily, the last one had a negative correlation in their relationship.China should strive to improve the position in GVC and expand to the high value-added sections at both ends. Focusing on enlarging domestic demand and building national value chain to meet market demand at home and abroad. Encouraging domestic enterprises to implement foreign promotion so that we can build a new GVC ourselves, which is cored by specialty product, brand and marketing strategy.