China’s Position In GVC Division And Its Influence Factors

Since the reform and opening up and the accession to the WTO,China has assumed the division of labor in processing and exporting trade in the world economy and trade by virtue of its abundant labor resource endowment.China’s economic aggregate is now ranked second in the world,and the total volume of imports and exports has repeatedly ranked first in the world.At the same time as China’s import and export scale continues to expand,unsustainable development issues such as resource consumption,environmental pollution,and overcapacity are highlighted.Transforming the mode of economic development,driving development with innovation,and improving the value-added ability of China’s export products can improve the international competitiveness of China’s export products while improving China’s trade income.In order to study the status of GVC division of China’s overall,manufacturing and service industries and various sub-sectors,this paper first uses the value-added trade law,combined with the data in the value-added trade database jointly issued by OECDWTO,and the overall industry,manufacturing and the service industry and the export value-added export capacity of various industries have been measured and analyzed.It is found that while China’s total foreign trade volume is expanding,China’s overall foreign trade value-added export capacity is also growing.The manufacturing segment with the highest value-added export volume has been transformed from the traditional competitive advantage industry of textiles,leather and footwear to the electronics,electrical and optical equipment industries.The highest annual growth rate of valueadded exports in the service industry segment is the financial industry.In order to further clarify the status of China’s GVC division of labor,draw on the GVC status index proposed by Koopman et al,combined with the data in the value-added trade database,the GVC status index of China’s overall,manufacturing and service industries and various sub-sectors from 2000 to 2015 was measured,and the GVC division status of BRICS countries closely cooperating with the ‘Belt and Road Initiative’ was further compared and analysed.The results show that China’s overall GVC status index was negative from 2000 to 2006,and it turned positive and showed an upward trend after 2006.The increase in China’s manufacturing status index has boosted China’s overall status index,and the high value index of China’s service industry has maintained the high value of China’s overall status index.The higher rankings in the manufacturing sector are other manufacturing and recycling equipment,food,beverages and tobacco,basic metals and metal products,textiles,leather and footwear,which are traditional Chinese competitive advantages and resource-intensive industries.In the service industry segment,the GVC status index of the financial industry,transportation,warehousing and postal communication industry is on the rise,and other service industry sub-sectors are on a downward trend.In the comparison of the GVC status index in the BRICS countries,the overall status index of the manufacturing industry in Brazil and Russia is on the rise,which is at a high level among the BRICS countries.The overall position index of China’s manufacturing industry is negative except 2014,but its position index is the largest increase among BRICS countries.The overall status index of China’s service industry has shown a downward trend,but it has always been in the leading position in the BRICS countries.In order to further improve the status of China’s GVC division of labor,this paper considers the influencing factors of R&D investment,human capital,infrastructure,transaction costs,FDI,OFDI,resource endowment and trade facilitation on the basis of relevant economic theory and trade theory,and carried out an empirical analysis of the factors affecting the status of China’s GVC division of labor.The results show that the improvement of infrastructure and the increase of foreign direct investment have a positive impact on improving the status of China’s GVC division of labor.Due to the low efficiency of the use of funds for research and development in China and the low conversion rate of research and development results,and the inflow of foreign direct investment and the improvement of resource endowment involve the low value-added processing and assembly export trade industry,so these factors have a retarding effect on improving China’s GVC division of labor.Based on the above empirical analysis results,this paper proposes that in order to further improve the value-added ability of China’s export products and improve the status of China’s GVC division of labor,we should increase R&D investment in hightech industries,strengthen the legal protection of intellectual property rights,and optimize the flow of foreign direct investment,and deepen the structural reform of the supply side and promote the integration and development of the service industry and the manufacturing industry.