Research On The Developing Countries' Gains From Trade Under Division Of Labor In The Global Value Chains

Trade benefit is a starting point and end-result for countries participated in international division and international trade. It is the international division of labor that decides the pattern of trade benefits. Since the 1960s, as the development of international division, the division of global value chains (GVC) has also experienced a development of wide-ranging and deep-going. More and more developing countries have embedded in GVC by specialization in the lower value-added chains through processing trade. The division of labor in GVC has brought some profound changes for trade benefits of developing countries, which embody not only new opportunities, but also traps or risks.This dissertation takes the trade benefits of developing countries in GVC as its core to analyze dynamic trade benefit and risks of the developing countries in GVC, using a large quantity of literatures. It also talks about the strategies and practices to promote the trade benefits of developing countries, combining with the current development of China.The dissertation is divided into six chapters. The first chapter introduces the background and significance of research, the literature review, the logic arrangement of the dissertation, the methods of research, and innovations. The second chapter basically discusses the emergence of Global Value Chains and the participation of developing countries in the GVC. Firstly, it analyzes the connotation of the division of labor in GVC and summarizes the characteristics and motivation of GVC through the analysis of the historical evolution of international division of labor. Secondly, the paper analyzes the participation's forms and characteristics of the developing countries in GVC. Finally, this chapter introduces some indexes used to measure the degree of participation in GVC and its calculation methods and conclusions, and analyzes the main factors that affect the participation degree of developing countries in GVC.The third chapter analyses the static trade benefits and division risks in GVC of developing countries'. First of all, it points out the characteristics of variation in the static trade benefits of developing countries in GVC. That is the true manifestation of the static trade benefit of developing countries is the variation of export value-add because of the diversification of trade bodies and the division of trade benefits. And then, it analyses the static trade benefit and its variations of developing countries through the use of extend model of traditional trade theories, and gradually deduces that traditional trade benefits index- "trade conditions" can no longer reflect the static trade benefits of developing countries'. On the basis of this, it establishes a function of trade benefits of developing countries with the using of "smile curve", and analyses further the variation of trade benefits curve and the impacts to trade benefits of developing countries under the conditions of technological advance, non-full employment, and industry expansion. Finally, this chapter proposes a more vividly index under the basis of absorb and draw upon all the achievements of previous studies, the comparative export value-added to manifest the static trade benefits of developing countries in GVC, and does a calculation for the manufacturing industry of China with the formula and calculation method of export value-added. The result shows that the benefit that China acquires in GVC is only one third of its export value. Although the proportion shows a trend of ascending as the economic development, technological advance, the trend is not significant. It can be seen through the analysis of this chapter that the developing countries are in a disadvantageous position and acquire relatively smaller trade benefits in this new mode of division. And the developing countries would probably face the effect of "tragic growth" and "pack lock"The fourth chapter discuses about the dynamic trade benefit with the analysis of historical experience and logical deduction from the point of view of the effect path and interest risk that GVC has to employment, national income, technological advance, industry development. It concludes that the GVC not only has positive effect to employment, technological advance, industry development, and economic growth, but also risk. And the positive effects are not the same for the differences in degrees of participation in GVC and the national economies and institutional environment in various countries.The fifth chapter explores how to promote the static and dynamic trade benefits in GVC of the developing countries. For the static trade benefit, it proposes that the developing countries should increase overall and unit division value-added, and seek the harmonious development in international division to create the fame of national manufacture. For the dynamic trade benefit, the developing countries should exert its late-development advantage of developing countries to avoid and decrease risk of trade.The sixth chapter analyses status of China in GVC and its trade benefits. Firstly, it describes the status and characteristics of China in GVC objectively from the point of view of classification of goods processing and processing trade, talks about the dynamic benefits from the analysis of historical experience that China acquires from GVC, and analyses the impacts of processing trade to economic growth using co- integration analysis and the method of Granger causality test.In view of the importance of trade between China and the U.S., and the significance of the two countries in international arena, this dissertation analyses the trade benefit that China acquires in the exportation to the U.S. It discuses the factors that affect the division of labor in GVC in the trade between the two countries, calculates the value-added that China acquires in the exportation of manufacture industry to the U.S., and points out that the static benefit of trade between the two countries is much smaller than that of the actual trade surplus. It also analyses the actual impact of the exportation of US to employment, improvement of industry structure, and technological advance of China through the empirical analysis of co-integration and granger causality test and impulse response diagram using the index of China's value-added of exports to the U.S. The result shows that the impact is positive which is in line with the conclusion of Chapter four, but the impact is not large. Finally, it analyzes the risk of trade benefit and the dilemma in development that China faces in GVC, proposes that China should adjust the strategy of value chain division promptly and seek the effective measures to promote the trade benefits in GVC.