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COVID-19 Shock and Global Value Chains: Is There a Substitute for China?

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  • Meng Qin
  • Xiuyan Liu
  • Xiaoxue Zhou

Abstract

COVID-19 has had a worldwide impact. The consensus is that the sudden pause of global production and the shrinking international trade will contract the global economy. This study explores the short-term impact of the COVID-19 shock on global value chains (GVC), especially considering China’s production-capacity damage. Findings suggest that downstream countries and sectors suffer more from China’s production disruption than upstream ones. The Most impacted countries are the United States, South Korea, Japan, and Germany; while the most-affected sectors include electronic and optical equipment, textiles, machinery, manufacturing, and wholesale trade. It is found that China is too important in GVC to be substituted for in the current world economy.

Suggested Citation

  • Meng Qin & Xiuyan Liu & Xiaoxue Zhou, 2020. "COVID-19 Shock and Global Value Chains: Is There a Substitute for China?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 56(15), pages 3588-3598, December.
    • Handle: RePEc:mes:emfitr:v:56:y:2020:i:15:p:3588-3598
    DOI: 10.1080/1540496X.2020.1855137
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    Cited by:

    1. Thai Hung, Ngo & Nguyen, Linh Thi My & Vinh Vo, Xuan, 2022. "Exchange rate volatility connectedness during Covid-19 outbreak: DECO-GARCH and Transfer Entropy approaches," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 81(C).
    2. Sui, Bo & Chang, Chun-Ping & Jang, Chyi-Lu & Gong, Qiang, 2021. "Analyzing causality between epidemics and oil prices: Role of the stock market," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 148-158.
    3. Gao Tianming & Vasilii Erokhin & Aleksandr Arskiy & Mikail Khudzhatov, 2021. "Has the COVID-19 Pandemic Affected Maritime Connectivity? An Estimation for China and the Polar Silk Road Countries," Sustainability, MDPI, vol. 13(6), pages 1-39, March.
    4. Lee, Jeoung Yul & Yang, Young Soo & Ghauri, Pervez N. & Park, Byung Il, 2022. "The Impact of Social Media and Digital Platforms Experience on SME International Orientation: The Moderating Role of COVID-19 Pandemic," Journal of International Management, Elsevier, vol. 28(4).
    5. Chen, Yin-E & Li, Chunyan & Chang, Chun-Ping & Zheng, Mingbo, 2021. "Identifying the influence of natural disasters on technological innovation," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 22-36.
    6. Shah, Sayar Ahmad & Garg, Bhavesh, 2023. "Identifying efficient policy mix under different targeting regimes: A tale of two crises," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 975-994.
    7. Naidu, Dharmendra & Ranjeeni, Kumari, 2021. "Effect of coronavirus fear on the performance of Australian stock returns: Evidence from an event study," Pacific-Basin Finance Journal, Elsevier, vol. 66(C).
    8. Narayan, Paresh Kumar, 2021. "COVID-19 research outcomes: An agenda for future research," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 439-445.
    9. LI, Yang & Luo, Jingqiu & Jiang, Yongmu, 2021. "Policy uncertainty spillovers and financial risk contagion in the Asia-Pacific network," Pacific-Basin Finance Journal, Elsevier, vol. 67(C).
    10. Xu, Jin & Huang, Shoujun & Shi, Lu & Sharma, Susan Sunila, 2021. "Trade conflicts and energy firms' market values: Evidence from China," Energy Economics, Elsevier, vol. 101(C).
    11. Feng, Gen-Fu & Yang, Hao-Chang & Gong, Qiang & Chang, Chun-Ping, 2021. "What is the exchange rate volatility response to COVID-19 and government interventions?," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 705-719.
    12. Cao, Qingzi & Fang, Ming & Pan, Yuying, 2022. "Minority shareholders protection and corporate financial leverage: Evidence from a natural experiment in China," Pacific-Basin Finance Journal, Elsevier, vol. 73(C).

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