China-effect on value added and on trade in Global Value Chains

Abstract

In the context of Global Value Chains (CGV), this article aims to demonstrate the impacts of the Chinese economy on international trade and on the distribution of value added (VA) worldwide, in the 21st century. For this, first, the evolution of the literature on the ways of measuring the value of trade that best reflects the contemporary dynamics of Global Value Chains (GVC) was discussed. Secondly, the decomposition of Borin and Mancini (2017) was applied to the World Input_Output Database (WIOD), in the period 2000-2014. The contribution of this paper to the literature is demonstrating the evolution of methodology on the topic, as well as by demonstrating the structural changes that Chinese growth has caused in the fragmentation of production in GVC and in the distribution of added value worldwide, in sectorial terms. It is also noteworthy, that the data still suggest a convergence to the previous literature that suggests a rebalancing of Chinese growth and a process of substitution of imports.

Keywords:
international trade; value added exports; Global Value Chains; fragmentation; China