Geopolitical Risk And China Embedding In The International Regional Valne Chain

With the deepening of global fragmentation production,multinational enterprises are playing an increasingly important role in global trade activities.In the current world economic pattern of "who cannot leave who",any country is inevitably impacted by the geopolitical events of other countries,and the influence of geopolitical risk factors on the global(regional)value chain is increasingly prominent.Whether the geopolitical risk will affect China's position in the internal value chain of different countries is the main issue studied in this paper.This paper summarizes the existing literature and concludes that the geopolitical risk mainly comes from extreme risk events and domestic institutional environment,while the essence of participating in the division of labor in the value chain is the investment and trade behavior of transnational enterprises.The impact of extreme risk events on international investment mainly affects the fixed cost of investment enterprises.The previous investment will be abandoned and the value chain may be interrupted if serious.The impact on international trade is mainly to reduce the home-country's investment in the intermediate and final products of the destination country;This paper mainly influences the production transaction cost of the home-country enterprise from three aspects of politics,economy and law,further influences the investment and export to the country of destination,and finally affects the proportion of home-country added value in the country of destination's export to foreign added value,that is,the status of international regional value chain.In addition,a mathematical model was established based on the theoretical logic analysis,and the effect of geopolitical risk on the export behavior of Chinese enterprises was deduced based on the idea of Chinese export enterprises' identification of the "reliable" degree of foreign agents Subsequently,empirical tests were conducted by constructing geopolitical risk indexes and calculating China's position in different regional value chains.The main conclusions are as follows:First,as added value contained in export abroad is the proportion of the added value of China as the explained variable,geopolitical risk index in the position in the value chain in China have a significant and robust positive effect,also in which a country's geopolitical risk is lower,the status of China's value chain in the country is higher;In addition,the trading activities of high-tech products are more affected by geopolitical risks.Second,after the endogeneity was eliminated by using instrumental variable method and differential GMM method,it was found that the regression results were significant and robust by using different measurement methods,but the regression coefficients were significantly different After examining the effects of extreme risk events and institutional environment on China's promotion in the value chain,it is found that the reduced frequency of extreme risk events and the improvement of institutional environment can effectively enhance China's position in the international and regional value chain.Third,after time and country regression,the geopolitical risk index still has a significant positive relation to China's position in the value chain of various countries.In addition,compared with the post-financial crisis,China's position in the value chain of various countries before the financial crisis was greatly affected by geopolitical risks.In addition,geopolitical risk has more impact on developing countries than developed countries.Finally,we suggest on how China should cope with external risks and improve its position in the value chain of various countries.