Apr 1, 2017 - Mar 31, 2018
This research project aims to provide a new theory to interpret the success of China’s exports in the last three and half decades. Specifically, it intends to explain China’s success in the context of global value chains (GVCs).
After three and half decades of rapid economic growth, China has surpassed Germany, Japan and the US and emerged as the largest exporting nation.
China’s rapid growth of exports have benefited significantly from its participation in GVCs. Chinese firms have taken advantage of brands, advanced technology and global distribution networks, which belong to lead firms of GVCs, to sell their low value added labor services and low-tech components to global consumers. The conventional literature mainly focuses on comparative advantage, exchange rates, FDI and China’s open door policy to explain the success of China’s exports. The role of GVCs has been ignored.
This research attempts to investigate the unprecedented success of China’s exports from the angle of GVCs. It will be the first research interpreting systematically China’s export boom in the context of GVCs. It will show that GVCs have been functioning as a vehicle for Chinese exports entering international markets. By successfully plugging into GVCs, Chinese firms have been able to bundle their low skilled labor services with globally recognized brands and advanced technologies of multinational enterprises, and then sell them to consumers of international markets. Continuous technology innovations, aggressive promotions on brands and the global distribution networks of lead firms of GVCs, constantly expand and create new demand, which in turn lifting demand for the tasks of Chinese firms which have integrated with supply chains, and eventually enhancing China’s exports.