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Domestic Value Creation in the Involvement in Global Value Chains: The Case of Chinese Economy

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  • Hiroyuki Taguchi
  • Jiejun Li

Abstract

This paper examines how the Chinese economy has been involved in global value chains from the perspective of domestic value creation, by using the OECD value-added-trade data (OECD TiVA database). This study contributes to the existing literature by decomposing the domestic value creation into a direct effect from export industries and an indirect effect from the other supporting industries. The empirical estimation first identified the “smile curve” in the “indirect” domestic value creation in total manufactures as the average pattern of the Asian GVCs development paths, in which the domestic value share to exports declines at the early development stage and regains itself at the later stage with the turning point being at 1,830 US dollars as per capita GDP. Then the analysis confirmed the position of Chinese economy, which has already passed the Asian average turning point and has entered the phase of regaining the domestic value share to exports. Finally, the analysis found that the domestic value creation in China has originated from the development of supporting industries, in particular, service industries, which might reflect the progress in basic infrastructure there.

Suggested Citation

  • Hiroyuki Taguchi & Jiejun Li, 2018. "Domestic Value Creation in the Involvement in Global Value Chains: The Case of Chinese Economy," Asian Development Policy Review, Asian Economic and Social Society, vol. 6(3), pages 155-168.
    • Handle: RePEc:asi:adprev:v:6:y:2018:i:3:p:155-168:id:263
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    Cited by:

    1. Asrori Asrori & Muhammad Ihlashul Amal & Atta Putra Harjanto, 2019. "Company Characteristics on the Corporate Social Reporting Index of Corporate Social and Environmental Disclosure in Indonesian Public Companies," International Journal of Energy Economics and Policy, Econjournals, vol. 9(5), pages 481-488.
    2. Taguchi, Hiroyuki & Zhao, Jun, 2022. "China’s global value chain linkage and logistics performances in emerging ASEAN economies," MPRA Paper 113808, University Library of Munich, Germany.
    3. Liuyang Xu & Muhammad Nadeem & Zilong Wang, 2022. "The Environmental Patents, Changing Investment, Trade Landscape, and Factors Contributing to Sustainable GVCs Participation: Evidence from Emerging Market Countries," Sustainability, MDPI, vol. 14(11), pages 1-19, May.
    4. Ping Hua, 2022. "How Does GVCS Participation Influence Manufacturing Productivity? The Case of China," Post-Print hal-03767838, HAL.
    5. Muhammad Haseeb & Tulus Suryanto & Nira Hariyatie Hartani & Kittisak Jermsittiparsert, 2020. "Nexus Between Globalization, Income Inequality and Human Development in Indonesian Economy: Evidence from Application of Partial and Multiple Wavelet Coherence," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 147(3), pages 723-745, February.

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