Institute of World Economics and Politics, Chinese Academy of Social Sciences
The paper considers the domestic value chain based on the global value chain, building for the first time a framework tracing value added in one country’s exports at the regional level. Then, based on this framework, this paper traces value added in China’s exports at the provincial level, and makes some applications. The findings are as follows. (1) Among the sources of the provincial exports value, domestic value added has the highest share, while returned value added has the lowest share, and domestic vertical specialization and foreign vertical specialization have medium shares. There is a very strong negative correlation between the provincial economic development level and the domestic value added share, and a very strong positive correlation between the provincial economic development level and the foreign vertical specialization share. (2) The provincial export gap measured by the value added export narrows significantly. Province-industry with comparative advantages tends to provide more value added to other provinces. Chinese exports’ low domestic valued added ratio is mainly derived from the low ratio of the value added exports to the gross exports in the manufacturing industry of coastal provinces. (3) The revealed comparative advantage measured by the value added exports and the gross exports displays differences. The comparative advantage has even reversed for many province-industries. For most provinces, the export specialization degree measured by the value added exports is lower than that measured by the gross exports.
global value chains;value added;comparative advantage;export specialization
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