Analysis of China's Manufacturing Industry in the Global Value Chain Division System

Abstract The division of the global value chain has become an important form of social division of labor. Since the reform and opening up, China has actively integrated into the global value chain division and has gradually grown into a global manufacturing and production base, relying on abundant labor resources, strong industrial support and processing and manufacturing capabilities. 2012...
The division of the global value chain has become an important form of social division of labor. Since the reform and opening up, China has actively integrated into the global value chain division and has gradually grown into a global manufacturing and production base, relying on abundant labor resources, strong industrial support and processing and manufacturing capabilities. In 2012, China's manufacturing industry revenue exceeded 90 trillion yuan, and the industrial added value of the industry reached nearly 20 trillion yuan, accounting for one-fifth of the global manufacturing value added, and has become a major manufacturing country in the world.

However, what is the ability of China's manufacturing industry to obtain added value in the global value chain division of labor? Is there a high domestic value added in manufacturing exports? How will China's manufacturing industry further transform and upgrade in the global value chain division system in the future? These problems have been studied by the National Natural Science Foundation of China, the National Natural Science Foundation of China, and the “Research on the Transformation and Upgrading Strategy of China's Manufacturing Industry in the Context of Global Value Chains” jointly undertaken by China University of Geosciences and the State Council Development Research Center.

The depth of manufacturing exports depends on the horizontal comparison. China’s manufacturing exports imply a higher proportion of domestic value-added than the world average, but there is still a certain gap with developed countries such as the United States. In 2011, China's manufacturing exports implied a domestic value-added ratio of 76%, the world average was 69%, China was 7 percentage points higher than the world average; China's manufacturing exports implied a foreign value-added ratio of 18%, the world The average level is 23%, and China is 5 percentage points lower than the world average. This indicates that compared with the world average, China's manufacturing industry has shown strong value-added acquisition ability after years of development.

However, compared with developed countries such as the United States and Japan, China’s manufacturing exports imply a slightly lower proportion of domestic value-added. In 2011, US manufacturing exports implied a domestic value-added ratio of 79%, and Japan accounted for 81%, both higher than China. This shows that compared with the United States and Japan, the value-added capacity of China's manufacturing industry in the global value chain still needs to be improved. Interestingly, however, the proportion of domestic value added implied in manufacturing exports from Germany, the United Kingdom, France and other countries in the EU member states is relatively low. The main reason is that the highly integrated EU internal trade is relatively developed. In addition, compared with emerging economies such as India and Mexico, China’s manufacturing exports imply a higher proportion of domestic value-added. In short, from a horizontal comparison, although the ability of China's manufacturing industry to obtain added value in the global value chain still needs to be improved compared with the US and Japan, it is higher than the world average, especially compared with most emerging economies. China's manufacturing industry has shown strong ability to acquire value added in the global value chain division of labor.

From a vertical comparison point of view, with the wider integration into the global value chain division of labor, the proportion of domestic value added implied in China's manufacturing exports first declined and then rose. In 1995, the proportion of domestic value-added in manufacturing exports was 82%, and it fell to 71% in 2006. Especially after 2002, the proportion of domestic value-added implied in China's manufacturing exports declined more significantly. This is mainly because China's accession to the WTO has been more widely integrated into the global value chain division of labor, and the use of global intermediate products to produce export products more widely. The proportion of foreign added value implied in manufacturing exports has increased, and the proportion of domestic value-added has decreased. After 2006, the proportion of domestic value added implied in China's manufacturing exports increased significantly, from 71% in 2006 to 76% in 2011, indicating that after the elimination of the adverse effects of WTO accession, China's manufacturing industry's international competitiveness Further enhanced, the ability to gain value added in the global value chain has increased.

Different industries have their own characteristics. China's labor-intensive manufacturing industry has a high ability to obtain added value in the global value chain division of labor, and has been steadily improving in recent years. Labor-intensive manufacturing industries mainly include food, beverage manufacturing and tobacco, textiles and textiles, leather, fur, feather and footwear, wood processing and wood, bamboo, rattan, palm, grass manufacturing, paper and paper. Reproduction of the product industry, printing and recording media, other manufacturing industries, and waste materials and recycling of old materials.

From the horizontal comparison point of view, China's labor-intensive manufacturing exports not only obtain a higher domestic value-added, but also a higher proportion of domestic value-added in exports. In 2011, China’s labor-intensive manufacturing exports implied a domestic added value of US$374.4 billion, ranking first in the world. In 2011, China’s labor-intensive manufacturing exports implied a domestic value-added of 86%, with the United States. It is flat, only 1 percentage point lower than Japan, 10 percentage points higher than the world average, and significantly higher than emerging economies such as India and Mexico. This shows that from the horizontal comparison, China's labor-intensive manufacturing industry has a high value-added acquisition capability in the global value chain division system. On the one hand, on the one hand, the total amount of domestic value added implied in China's labor-intensive manufacturing exports has grown rapidly, from $58.2 billion in 1998 to $374.4 billion in 2011; on the other hand, 1998 Since the beginning of the year, the proportion of China's labor-intensive manufacturing exports implying domestic value-added has been characterized by a decline and then rise. In 1998, China's manufacturing exports accounted for 87% of China's domestic value-added, and then gradually fell to 81% in 2004, and then showed a gradual upward trend. In 2011, it reached 86%, indicating that China's manufacturing industry is in the global value chain in recent years. The ability to gain added value has improved.

The main reason for the decline in the proportion of domestic value-added implied in China's labor-intensive manufacturing exports in the mid-to-late 1990s is that China's labor-intensive manufacturing industry, especially in the apparel industry, has developed rapidly. With the rapid development of international OEM, the related industries have more extensive use of foreign intermediate products, resulting in a lower proportion of domestic value added implied in exports. In recent years, the main reason for the steady increase in the proportion of domestic value added in China's labor-intensive manufacturing exports is that labor-intensive manufacturing industries, especially clothing and other industries, have gradually been upgraded from international OEMs to independent brands. Thus, the ability to obtain added value in the global value chain division of labor system is further enhanced.

At the same time, China's capital-intensive manufacturing industry's ability to obtain added value in the global value chain division of labor is generally low, and has declined in recent years. Capital-intensive manufacturing industries mainly include: petroleum processing, coking and nuclear fuel processing industries, chemical raw materials and chemical products manufacturing, chemical fiber manufacturing, rubber and plastic products, non-metallic mineral products, metal products, and general-purpose equipment manufacturing. Industry and so on. Although the total amount of domestic added value implied in China's capital-intensive manufacturing exports is relatively large, it reached 375.7 billion U.S. dollars in 2011, only after Germany and the United States, but the domestic value added implied in China's capital-intensive manufacturing exports. The proportion is relatively low. In 2011, the proportion of DVA in China's capital-intensive manufacturing industry was 75%, which was not only lower than 87% in Japan, 85% in the US, 79% in Germany, and slightly lower than 77% in India, indicating that China is capital-intensive. The value-added capacity of the manufacturing industry in the global value chain division of labor needs to be further improved.

From a vertical comparison, although the total amount of domestic value added implied in China's capital-intensive manufacturing exports has grown rapidly, from $37 billion in 1995 to $375.7 billion in 2011, China's capital-intensive The proportion of DVA in manufacturing industry showed a downward trend. In 1995, the proportion of DVA in China's capital-intensive manufacturing industry was 84%, and it dropped to 75% in 2011. This aspect is of course more integrated with China's capital-intensive manufacturing industry in the global value chain division of labor system, the use of foreign intermediate products, etc., but also shows that China's capital-intensive manufacturing industry gains added value in the global value chain division of labor system. The ability has not improved significantly.

It should be noted that China's technology-intensive manufacturing industry's ability to obtain added value in the global value chain is generally low, and has also shown a downward trend in recent years. Technology-intensive manufacturing industries mainly include electrical and optical equipment manufacturing, transportation equipment manufacturing and other industries. Although the total amount of domestic added value implied in China's technology-intensive manufacturing exports is relatively large, it reached US$578.4 billion in 2011, ranking first in the world. However, China's technology-intensive manufacturing DVA ratio is relatively low. In 2011, it was 71. %, only 2 percentage points higher than the world average, significantly lower than Japan's 84%, the United States 82%, Germany's 76%, indicating that China's technology-intensive manufacturing industry's ability to obtain added value in the global value chain division is still low. .

In order to further reflect the value-added ability of China's technology-intensive manufacturing industry in the global value chain, the trade situation of electrical and optical equipment manufacturing between China and the United States is taken as an example for further analysis. In terms of total trade value, bilateral trade between China and the United States in electrical and optical equipment manufacturing is the largest among all sectors in recent years. In 2011, it reached US$212 billion, of which China exported US$176.9 billion to the United States. Exports to China were 35.1 billion US dollars, a difference of more than 4 times. However, if the total exports are split into two categories, final product export and intermediate product export, it can be seen that most of the electrical and optical equipment manufacturing products exported by China to the United States are final products, while the United States exports intermediate products to China. Mainly. In 2011, China’s export of electrical and optical equipment manufacturing products to the United States totaled 104.2 billion US dollars, accounting for 58.9% of the total export value, and intermediate products worth 78.2 billion US dollars, accounting for 41.1%; and the United States exported electricity to China. The total value of final product exports in optical equipment manufacturing products was US$10.6 billion, accounting for 30.2% of total exports, and intermediate products worth US$24.5 billion, accounting for 69.8%. This reflects the different positions of China and the United States in the global value chain division of electrical and optical equipment manufacturing. China mainly produces electrical and optical equipment manufacturing final products through assembly, etc., while the United States mainly supplies electrical and optical equipment manufacturing. Intermediate products.

Further, the total trade value of Sino-US electrical and optical equipment manufacturing industry is decomposed into DVA, FVA, RDV and PDC. The decomposition results show that in the electrical and optical equipment manufacturing industry, the US and China exports have very different value-added structures. First, in 2011, the proportion of DVA in the US exports of electrical and optical equipment manufacturing products to China was 81%, while the proportion of DVA in China's exports of electrical and optical equipment manufacturing products to the United States was 70%. It can be seen that China exports electrical and optical equipment to the United States. The proportion of domestic increase implied in manufacturing products is relatively low. Secondly, the proportion of FVA in China's exports of electrical and optical equipment manufacturing products to the US exceeds that of the United States. In 2011, China was 26%, and the United States was 8%. It can be seen that China exports electricity to the United States. And optical equipment manufacturing products imply a large amount of foreign added value, while the United States exports to China's electrical and optical equipment manufacturing products implied a lower proportion of foreign value added; Finally, China exports electrical and optical equipment manufacturing to the United States The proportion of RDV in the industry is negligible, only 0.7% in 2011, while the proportion of RDV in the United States is more significant, 7% in 2011, which also reflects the position of China and the United States in the global production chain division of electrical and optical equipment manufacturing. s difference. Since the United States is mainly engaged in product design and export parts production, it is in the upstream position in the global value chain, and a considerable portion of US export value added is returned to China through other countries and used by American consumers. In comparison, China is in the lower reaches of the value chain, and few of the added value of Chinese intermediate exports are returned to China through imports.

From a vertical comparison, on the one hand, the total amount of domestic value added implied in China's technology-intensive manufacturing exports has grown rapidly, from $28.7 billion in 1995 to $578.4 billion in 2011; but on the other hand, China The proportion of DVA in technology-intensive manufacturing has not increased significantly or even decreased. In 1995, the proportion of DVA in China's technology-intensive manufacturing industry was 78%, and in 2011 it was 71%, a decrease of 7 percentage points.

Policy recommendations Based on the above research, the following policy recommendations are proposed:

First, actively participate in the global value chain division of labor and increase the proportion of domestic value-added in manufacturing exports. To this end, the global value chain should be embedded in the overall development strategy and development policy, and promote the participation of the global value chain by providing a favorable investment environment and infrastructure conditions, while strengthening the production capacity of local enterprises, especially through product upgrades, process upgrades, Functional upgrades, industrial chain upgrades to achieve upgrades in China's enterprises, enhance the ability to acquire value-added in the global value chain.

Second, appropriately adjust industrial policies and strengthen support for key links. For a long time, China has implemented a sectoral priority industrial policy, which is conducive to accelerating the pace of catching up. However, with the improvement of the development level, the uncertainty of industrial development, market demand and technological innovation is increasing. Continued adoption of sector-first industrial policies is likely to lead to systemic errors. At the same time, departmental priority industrial policies often attach importance to supporting so-called emerging industries, while ignoring support for traditional industries. From the perspective of the ability of China's industries to obtain added value in the global value chain division of labor, labor-intensive and other traditional industries have shown strong capabilities. Therefore, it is necessary to appropriately adjust industrial policies. In the context of global value chain division of labor, industrial policies need to shift from focusing on departments to focusing on supporting key links.

Third, build a global value chain dominated by multinational corporations in China. The main feature of the global value chain division is that multinational companies are dominant. According to UN data, the global value chain led by multinational corporations accounts for 80% of global trade. In 2010, about two-thirds of US merchandise imports and exports were completed in the international production network of multinational corporations, and 93% of Japanese merchandise and services exports and transnational Company related. Therefore, while promoting the participation of Chinese enterprises in the global value chain division, it is more important to focus on cultivating local multinational companies and enhancing their participation and control over global value chains.

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