The Impact Of U.S. Trade Policy Uncertainty On China’s Service Sector Position In The Global Value Chain Division Of Labor

In the current international context of economic globalization,the GVC(Global Value Chain)system is also deepening,and countries regard participation in the GVC system and obtaining high value-added from it to occupy the high-end position of GVC as the main goal of their economic development.China has gradually deepened its embedding in GVC through continuous opening up to the outside world and developing its foreign trade economy,among which the service industry has developed particularly rapidly and has not only occupied an important position in the national economy,but also become the main driving force for China’s rising position in GVC.However,trade frictions between the U.S.and China have intensified during this period as trade between the two countries has grown closer.The uncertainty in U.S.trade policy has also been strong due to the different strategic perceptions pursued by different presidents of the U.S.government.China’s service industry is particularly close to the U.S.and is therefore subject to strong trade policy uncertainty.Against this background,this paper conducts a specific study on how the uncertainty of U.S.trade policy will affect the division of labor status of China’s service industry GVC and the mechanism of the impact,and concludes that the enhancement of U.S.trade policy uncertainty will significantly inhibit the enhancement of China’s service industry GVC division of labor status,and on the basis of this conclusion,provides specific suggestions on how China’s service industry can better cope with U.S.trade policy uncertainty.On the basis of this conclusion,specific suggestions are made for how Chinese service industry can better cope with the uncertainty of U.S.trade policy,so that China’s service industry can continuously improve its GVC division of labor status.This paper explores the impact of U.S.trade policy uncertainty on the GVC division of labor status of the service industry from both theoretical and empirical analyses.Firstly,based on the existing domestic and foreign literature,the evolution of the relationship between China and the United States in the past 50 years is sorted out,and the purpose and rules behind the changes in U.S.trade policy are discovered by studying the relevant policies implemented by the United States on China during this period.The mechanism of the role of uncertainty on the division of labor status of GVC in service industry is then studied.Then,this paper uses the U.S.Trade Policy Uncertainty Index to represent the uncertainty of U.S.trade policy and measures the index by using the text extraction method,and the results show that: the uncertainty of U.S.trade policy has continued to increase and reached a peak growth rate during 2017-2020,which is the result of Trump’s vigorous suppression of China during his administration,until the China-US relations have eased after Biden took office,and the U.S.This paper uses the GVC division of labor status index of service industry to represent the division of labor status of service industry in GVC,and measures the index using the method constructed by Koopman and other scholars,the results show that both the GVC division of labor status index of service industry as a whole and the three types of service industry by factor inputs show an increasing trend but This indicates that the development of service industry is uneven and has been locked in the low end of GVC for a long time,but it has been trying to climb up to the high end of GVC.In terms of empirical evidence,this paper uses panel data of 19 segments of Chinese service industries from 2001-2018,with the GVC division of labor status index as the explanatory variable,the U.S.trade policy uncertainty index as the core explanatory variable,and the introduction of GVC participation,trade openness and foreign direct investment as control variables.The regression analysis is conducted through a two-way fixed effects model,and the reliability of the regression results is proved by robustness test and heterogeneity test.Through the regression analysis,this paper concludes the following:the uncertainty of U.S.trade policy has a significant inhibitory effect on the improvement of GVC division of labor status of China’s service industry,and also has a limiting inhibitory effect on the capital-intensive and knowledge-intensive service industry GVC division of labor status,and has an inhibitory effect on the index of labor-intensive service industry GVC status but is not significant,which also indicates that China’s reliance on cheap labor for production This also indicates that China’s advantage of relying on cheap labor for production is gradually disappearing and increasingly relying on knowledge-intensive service industries with advanced production technology.Finally,based on the results obtained,this paper makes several suggestions: China should pay attention to the cultivation of high-quality talents;improve the ability of technological innovation;promote the development of special service industries;adhere to the expansion of foreign opening;improve China’s institutional environment;and promote the normalization of China-US relations.