Research On The Impact Of China Free Trade Area Construction On The Embedding Degree Of Global Value Chain

Since the 1990s,regional trade liberalization has become an important trend in the development of international trade.As a representative of emerging economies and developing countries,China is actively involved in the process of regional trade liberalization.According to the data of China Free Trade Areas Service Network,China has signed 12 free trade agreements,involving 21 countries or regions.However,with the continuous development of the international division of labor,the same product production process was split into different countries,and formed a product production links based on the division of labor system,then gradually formed a global value chain.In the context of the global value chain,the development of intermediate trade has resulted in the distortion of the traditional trade statistics with the "total value of goods",which is misleading in calculating the actual trade profits of a country.China is particularly serious.What are the characteristics of China's value-added exports under the statistical method of value-added statistics based on real value expansion,and what is the impact of free trade area construction on China's embedded global value chain?This paper uses the Eora multi regional input-output table to decompose China's bilateral exports,and calculates the domestic value-added and foreign value-added in China's exports,both of which are important indicators of a country's degree of embedded in the global value chain.The results reveal that:China's domestic value-added exports as well as foreign value-added exports are increasing,which means that China's participation in the global value chain is increasing.The China's domestic value-added and foreign value-added exports mainly distributes in high income countries of Asia and Europe,mainly for Japan,Korea,Germany,Hong Kong,Britain,France,and the United States of North America.From the perspective of the change trend,the proportion of Japan's and the United States' domestic value-added and foreign value-added has declined,while Hong Kong's and South Korea"s has improved.On the five categories of China's domestic value-added and foreign value-added exports also appeared in a similar spatial distribution.This paper uses the trade gravity model to analyze the impact of constructing bilateral Free Trade Areas on the global value chain embedding.According to the empirical study results,we found that:Whether it is the overall or industry level,constructing Free Trade Areas with high income country has a significant effect on China's domestic value added exports and foreign value added exports,but with lower middle income countries has a certain inhibitory effect.At the same time,the export effect of Free Trade Areas with high income country on foreign value added is higher than the export effect of domestic value-added.Constructing bilateral Free Trade Areas with upper middle income country doesn't have significant effect on China's domestic value added and foreign value added exports,but for the primary products and resource intensive industries,capital intensive manufacturing and labor-intensive manufacturing industry,it has positive effects.