Dynamic Changes of Functional Specialization in China's Export and International Comparison under Global Value Chains


2020-07-02 02:20

Wang Zhenguo,Zhang Yabin,Niu Meng,Zhong Yuan
China Industrial Economics

Abstract: The functional specialization in export of a country ( and its sector ) in different activities , such as fabrication, R&D, management, and marketing, is crucial to its governance and control on the value chains,which magnifies the shortage of the existing aggregate value added studies on our understanding of global value chains(GVCs). Considering production fragmentation at the both spatial and functional levels, this paper defines the modified functional specialization indicators at the national and sectoral levels from the forward linkage ( rather than backward linkage). Based on the World Input-Output Database together with the newly compiled Labor Occupations Database, this paper re-estimates and analyzes the functional specialization and changes in China and major developed economies' exports . The results show that China's export is mainly specialized in fabrication activity .which is among the world leading level while it is weak in headquarter activities ( especially R&D and management), which is almost locked at the lowest level in the world and could not pose an export threat to the developed economies . China's manufacturing basically follows the functional development path of " relying on fabrication, entering market, targeting management and R&D", showing the coexistence of "strong" fabrication and" weak " management and R&D . The fabrication specialization of the typical processing sector " electronic and optical equipment " has reached the international leading level . The level of functional specialization of China's service is generally weaker than that of manufacturing, and generally lies behind in the world, indicating that there is still a long way to achieve the goal of becoming a world powerful-nation of service

Keywords:global value chains ; functional specialization ; domestic value added in export ; international comparison

The Chinese version appeared in China Industrial Economics, 2020(06).



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