China’s position in international division of labor under the Belt and Road Initiative: an input-output analysis from the perspective of value chain

WANG Shuli1 WU Chuhao

(1.School of Economics, Wuhan University of Technology, Wuhan, China 430073)

【Abstract】Can China use the open system of Belt and Road (B&R) to improve the B&R regional division of labor (DOL) and then leap onto high value-added links of the global value chain (GVC) once dominated by the European and the American developed countries? At present, the research on the international DOL positions of China and the B&R countries under the B&R Initiative is still scarce. Analyzing the position of China and the B&R countries in the GVC can help us primarily understand whether or not the implementation of the B&R Initiative has directly boosted both China and the B&R countries’ industrial competitiveness and international DOL and provide suggestions for the steady progress of the B&R Initiative and the improvement of China’s international DOL cooperation efficiency. This paper set an index of international DOL position, took 15 B&R countries as main research subjects and calculated the upstreamness indicators of 15 B&R countries and nine developed countries during 2011–2014 to analyze the international DOL positions of China and the B&R countries from the industrial perspective. Taking the proposal of the B&R Initiative in 2013 as a node, this paper discussed the position status and trend of the international DOL in China and the B&R countries before and after the implementation of the B&R Initiative. It reached the following conclusions. Firstly, in the B&R context, China has played a role in linking up with others. In the B&R linear value chain, China has greater access to high-end links in the GVC dominated by developed countries, which can help to break the long-term “lockup.” Secondly, with the industries associated with the B&R countries relatively strong, the complementarity among the industries is greater than competitiveness, namely, both sides can achieve better strategic docking and industrial coupling in all areas. The region of the B&R has achieved a leap in the DOL position. Thirdly, China plays a leading role in the B&R cooperation platform. Its industry and trade structure, generally better than B&R countries, have absolute technological reserve support in the manufacturing industry, which can help the B&R countries upgrade their own value chains through industrial transfer and technology output and promote regional DOL. Fourthly, in recent years, China’s international DOL position has improved somewhat, but its promoting way is still dominated by the traditional advantages of low-tech manufacturing. The conclusions of this paper can promote the steady progress of the B&R Initiative and China’s international DOL cooperation efficiency. Our implications include improving the B&R cooperation mechanism, changing the manufacturing development mode, promoting the development of high-end manufacturing, and increasing the support for high-value-added high-tech industries, which have been highly concerned by the Chinese government with corresponding strategy formulated. In short, this paper mainly expanded the existing research from the following three perspectives. Firstly, taking China and the B&R countries as research subjects, it analyzed their positions in the GVC and expanded the research on China’s DOL position under the B&R Initiative. Secondly, based on the industry relevance and complementarity between China and the B&R countries, it described the necessity and inevitability of the B&R Initiative, supplemented the theoretical basis for China’s role in the DOL before and after the implementation of the B&R Initiative. Thirdly, previous researches adopted the GVC participating index and the GVC position index, while this paper adopted the index of non-equidistant upstreamness of country exports to measure a country’s international DOL position. From the industrial perspective, it examined the trade structure and value added with calculation results more convincing.

【Keywords】 GVC; input-output analysis; upstreamness; linear value chain; the Belt and Road Initiative;

【DOI】

【Funds】 The National Social Science Fund of China (17CJY050)

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    Footnote

    [1]. ① http://news.hexun.com/2016-04-28/183600438.html [^Back]

    [2]. ① By 2017, more than 100 countries and international organizations joined the B&R Initiative. [^Back]

    [3]. ① The 64 countries measured by TII include Singapore, Malaysia, Indonesia, Myanmar, Thailand, Laos, Cambodia, Vietnam, Brunei, the Philippines, Iran, Iraq, Turkey, Syria, Jordan, Lebanon, Israel, Palestine, Saudi Arabia, Yemen, Oman, United Arab Emirates, Qatar, Kuwait, Bahrain, Greece, Cyprus, Egypt, India, Pakistan, Bangladesh, Afghanistan, Sri Lanka, Maldives, Nepal, Bhutan, Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan, Kyrgyzstan, Russia, Ukraine, Belarus, Georgia, Azerbaijan, Armenia, Moldova, Poland, Lithuania, Estonia, Latvia, Czech Republic, Slovakia, Hungary, Slovenia, Croatia, Bosnia and Herzegovina, Montenegro, Serbia, Albania, Romania, Bulgaria, and Macedonia. [^Back]

    [4]. ② Except Romania (ROV) show insignificantly positive correlation, the other countries all have significantly positive correlation in the non-equidistant upstreamness of industry. [^Back]

    [5]. ③ Both the equidistant upstreamness of industry and the non-equidistant upstreamness of industry measured 22 industries, namely, forestry, food and tobacco, textile, wood printing, coking coal and refined oil, chemicals, pharmaceuticals, rubber products, other metal products, basic metal products, electro-optical equipment, electrical equipment, automobile manufacturing, electric power, construction, land transport, transportation and storage, post and communications, accommodation and catering, telecommunications, financial services, and education. The non-equidistant upstreamness of export measured the c5–c24 manufacturing industries in WIOD (except C23). [^Back]

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This Article

ISSN:1001-9952

CN: 31-1012/F

Vol 44, No. 08, Pages 18-30

August 2018

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Article Outline

Abstract

  • 1 Introduction
  • 2 Theoretical analysis and index selection
  • 3 DOL positions of China and other B&R countries
  • 4 Factors restricting the rise of China’s international DOL position
  • 5 Conclusions and implications
  • Footnote

    References