Regional and global production networks: the case of China
| Pages | 126-135 |
| Published date | 06 October 2014 |
| DOI | https://doi.org/10.1108/JCEFTS-01-2015-0002 |
| Date | 06 October 2014 |
| Author | K.C. Fung |
| Subject Matter | Economics,International economics |
Regional and global production
networks: the case of China
K.C. Fung
Department of Economics, University of California, Santa Cruz, California, USA
Abstract
Purpose – The purpose of this paper is to examine various aspects of regional and global production
networks, with a special focus on China.
Design/methodology/approach – The author studies four different approaches to measure
production networks and discuss their strengths and weaknesses. The author presents some of the
results associated with some of these measurements.
Findings – The author nds that using trade data alone is simple but incomplete. Bringing in input–
output tables is useful but much more data would be needed. In addition, for the case of China, electronic
goods and telecommunication goods tend to have a higher foreign value added.
Research limitations/implications – Data with good quality can be a problem. The authors also
have difculty getting input–output tables for many years.
Practical implications – The results can guide policymakers as to which industries can create more
domestic value added. The results can also lead to betting of an understanding of trade balances
measured in the value added.
Social implications – The results can generate further understanding among citizens of many
different countries, including China, about the importance of different sectors in generating the value
added.
Originality/value – The value of this paper is to focus on alternative ways to measure the value added
in exports from China. The paper is the rst to discuss the strengths and weaknesses of different
approaches and present some of these results.
Keywords Exports, Chinese trade, Domestic value added
Paper type Research paper
1. Introduction
In this paper, I aim to examine various aspects of production sharing, rst in general,
and then I focus on the case of China. The phenomenon of production sharing is also
often called production fragmentation, vertical specialization (VS) or, in the
management literature, global or regional supply chain. Production sharing or
production fragmentation is the splitting up of the production processes into various
stages, with each stage of production being parceled out to different locations. The
resulting components and parts are then traded among members of the production
process chain and eventually assembled into nal goods and shipped to the nal
consumers, often consumers in rich markets such as the USA, the European Union (EU)
and Japan.
There are at least four economic reasons why production sharing is of major interest
to researchers and policymakers in various economies, including those in the Asia–
Pacic regions. This form of trade is important to developing and emerging countries
because it allows the countries to participate in the highly efcient and increasingly
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1754-4408.htm
JCEFTS
7,3
126
Journal of Chinese Economic and
Foreign Trade Studies
Vol. 7 No. 3, 2014
pp. 126-135
© Emerald Group Publishing Limited
1754-4408
DOI 10.1108/JCEFTS-01-2015-0002
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