An Analysis On Servitization Impact On Export Competitiveness Of Chinese Manufacturing Industries

During the last 40 years,manufacturing industry of China has experienced massive export growth in an explosive way,and has been deeply involved in the fragmentation of global production.Much of its growth was on account of price advantages of some traditional factors,such as labor.Based on the factor endowment and economic structure,it is reasonable and inevitable for China to participate in the specialization of global value chains?GVCs?in the way of processing trade,which contributes to a relatively small share of total value of final products in all GVCs and is regarded as lower value-added activities.Now,it may run of steam.With domestic demographic dividend gone,as well as the conflicts between environmental protection and economic development sharpening,it is unlikely for manufacturing industries to sustain in the old way of growing,and it is the time to upgrade.As a matter of fact,what China is going through is that that many developed and industrial countries have gone through.We can learn from their trend of evolution and transformation process of manufacturing industry that service sectors especially producer service sectors has been a leading support.When production process is more internationally fragmented,service sectors work as bonds between various unbundling stages in the production process.The participation of service factors like design and R&D itself adds great value to the final products.To understand the anatomy of embedded value added to manufacturing products and the effects of servitization to export competiveness,it is crucial to identify service inputs.To visualize the historical development and current situation of manufacturing servitization,an accounting framework based on input-output table is used in the anatomy of value added in global production network.It can be concluded that world-widely speaking,the value added share of service inputs in the final products has been on a rise.As for countries,there exists great difference in the process of manufacturing servitization.In a general way,for developed and high-income countries,value added from service sectors has changed in a limited degree since the beginning of this century.While developing countries,especially so-called BRIC,has experienced rapid development in the servitization of manufacturing industries.Also,the servitization process of Chinese manufacturing has received special attention.It can been seen that the knowledge and technology intensive industries such as the manufacturing of computer,electronic and optical products,the manufacturing motor vehicles,and the manufacture of electrical equipment have servitized in the highest level.Moreover,the work of tracing value added according its sources has proved that service inputs from domestic countries has been the leading power to manufacturing servitization.The domestic share of service value inputs in the final products of output in labor intensive industries is relatively higher than that in capital intensive and knowledge intensive industries.From the perspective of tracing trade in value added,RCA_VA Index?Revealed Comparative Advantage Index in value added?and MSI_VA Index?Market Share Index in value added?are constructed to measure export competitiveness of manufacturing industries.It has been found that,generally speaking,for developing countries such as China,labor-intensive industries have higher international market sharesandlargercomparativeadvantage;whilecapital-intensiveand knowledge-intensive industries are becoming more and more influential in global market.Both indexes indicate that manufacture of textiles,wearing apparel and leather product,manufacture of wood and of products of wood and cork as well as manufacture of other non-metallic mineral products are the most export competitive industries;while manufacture of transport equipment and manufacture of basic pharmaceutical products and pharmaceutical preparations are relatively less competitive in overseas market.Moreover,industries that have developed faster in the first 15 years of 21^stcentury are proved to be knowledge and technology-intensive rather than capital-intensive.In this paper,3 ways in which service intensity can help promoting export competitiveness are described.It is also found that the influence of seritization can be different across industries.There are also distinctions of effects due to the heterogeneity of services.To test the assumptions,an exam of relationship between export competitiveness and the seritization of manufacturing is conducted.Empirical results show that service intensity of manufacturing firms has positive influence on their export competitiveness.The result is statistically significant and robust across all manufacturing industries.Further analysis supports the assumption that the effect is heterogeneous for various types of service inputs and for industries with different factor intensities.The main body of the paper contains the following:Introduction:the main purpose of this part is to explain the proposal and background of the topic,and to state brief the methods used and the possible contributions to existing literatures.In Chapter 1,I have reviewed some related literatures on manufacturing servitization as well as export competitiveness,In Chapter 2,I tried to summarize that in what ways that service inputs in manufacturing goods affects its export competitiveness.In Chapter 3,an accounting framework based on international input-output table is described and conducted in this chapter.A detailed illustration of the development of manufacturing servitizaion across the world is also presented in this part and China is given special attention.In Chapter 4,a novel RCA_VA Index is constructed and applied to describe and concretize export competitiveness of manufacturing goods.In Chapter 5,the earlier Index is used in the analysis of the relationship between the competitiveness of exports and its share of service inputs.Chapter 6 comprises concluding remarks,policy suggestions and future research prospects.