| A striking feature of the global economy over the past few decades has been the existence of large and expanding external imbalances.For example,in the years leading up to the global financial crisis,some emerging market countries,typically China,accumulated large current account surpluses,while some developed countries,notably the United States,ran varying degrees of current account deficits.The Trump administration has used this as an excuse to launch three rounds of trade frictions against China.Another striking feature of the global economy,as trade deficits build up in one part of the world and surpluses in another,is the rise of global value chains.Driven by a combination of factors such as falling transportation costs,advances in information and communication technologies,and the promotion of trade liberalization policies,multinational companies are increasingly disperzing production to different parts of the world.Such global production fragmentation has resulted in an increasing proportion of intermediate goods trade in total trade.In the early stage of reform and opening up,China participated in the international division of labor by adopting the processing trade mode of "low technology,low added value and high energy consumption" in accordance with local conditions,accepted a large number of direct investment from Japan and South Korea,established production,processing and export bases in China,and then exported the final products to European and American countries.In this process,China gradually became the world’s factory.However,due to the existence of statistical defects,China’s international balance of payments overexpanded,but the actual trade gains were not high.Therefore,the US trade deficit and China’s trade surplus are in fact the natural result of the global division of labor.In addition,exchange rate plays an adjustment role in international trade.With the development of global value chain,the proportion of foreign added value included in exports increases,and trade price and marginal cost change synchronously,leading to the decrease of sensitivity of total trade to exchange rate changes and the so-called "exchange rate disconnection" mystery.In the backward linked global value chain participation,if a country’s exports to other countries contain intermediate inputs from a third country,its exports to other countries are affected not only by the bilateral exchange rate between the country and the exporting country,but also by the bilateral exchange rate between the country and the upstream intermediate goods exporting country.If the relative depreciation of the domestic currency,the price of goods exported to other countries will be affected by the marginal cost impact of higher relative prices from upstream intermediate goods.Similarly,in a forward-linked global value chain,if a country’s exports to other countries are re-processed and exported to a third country,its exports to other countries will be affected not only by bilateral exchange rates with other countries,but also by bilateral exchange rates with other countries and a third country.When the exchange rate of another country appreciates,the price of goods from one country to another will be affected by downstream demand shock as exports from other countries become relatively expensive to third countries.Based on the above research ideas,the structure of this paper is divided into four parts,consisting of nine chapters.The first part is the research basis,including chapters 1-4.Chapter 1 is the introduction.The main content includes the research background and significance of the paper,the research ideas and methods followed in the research process,as well as the possible innovations and shortcomings.Chapter 2 is a literature review.Summarizes existing literature on global value chain is put forward and the development of the concept of power,global value chain,as well as its effect on the global value chain division of labor status of research,combing the cause of the current account imbalances,influence,and the current account of the existence of rebalancing challenge,exchange rate and investigates the reason of incomplete transmission,document preparation for research papers.Chapter 3 is the theoretical basis.This paper focuses on the measurement theory of Global Value Chain,current account balance theory and exchange rate adjustment theory to provide theoretical premise and data support for the establishment of the theoretical framework of global value chain’s participation and influence on current account and empirical analysis.Chapter 4 presents typical facts about GVCS ’impact on current accounts.It includes the development status and trend of Global Value Chain,China’s participation in global value chain,and descriptive statistics of global value chain division status.The periodical characteristics and country characteristics of current account imbalance,the evolution of China’s current account,and the possible adverse effects of current account imbalance.Through comparative analysis,it is found that the division of labor of global value chain and the current account of various countries have sustained imbalance,which highly overlaps at the time node.Therefore,two hypotheses are proposed as follows: first,GVC participation will expand the current account balance of a country;Second,GVC’s participation in expanding a country’s current account balance is mainly due to the reduced moderating effect of real effective exchange rate on the current account,that is to say,the participation of GVC weakens the moderating effect of real effective exchange rate on the current account balance.The second part is theoretical analysis and empirical test,including chapters 5-7.Chapter 5 is the theoretical model.Construct a macro structural model including intermediate input trade,and take import and export volumes as a function of import and export prices,bilateral exchange rates,and GVC participation,so as to bring different GVC participation modes,exchange rates,and current accounts into the same theoretical analysis framework.It is concluded that in the forward linked global value chain,import prices have a supply impact on domestic exports through marginal cost effect.In the backward linked Global Value Chain,export prices are affected by the bullwhip effect of the downstream link,which forms a demand impact on domestic exports.Finally,it is concluded that in addition to the Marshall-Lerner condition,global value chain participation is another important path affecting the moderating effect of exchange rate on current account.Chapter 6 is an empirical analysis of the impact of global value chain on current account.By revising the External Balance Assessment model(EBA)of International Monetary Fund and adding the participation index of global value chain,and controlling all kinds of cyclical variables,macroeconomic fundamental variables and policy variables that may affect the current account,it is concluded that global value chain participation can increase the current account balance of a country.In the robustness test,the GVC participation index measured by the WIOD database in the baseline regression was replaced by the ADBMIRO database,and the eurozone sample was removed,the results remained robust.In the aspect of heterogeneity analysis,the different influences of current account deficit countries and surplus countries,developing countries and developed countries,and GVC participation on current account are investigated respectively.Chapter 7 is an empirical test of the exchange rate pass-through mechanism of global value chain’s impact on current account.First,the linear regression method is used to measure exchange rate elasticity and exchange rate pass-through coefficient.Then,the interaction terms of GVC participation,exchange rate pass-through and exchange rate flexibility are incorporated into the regression equation to investigate the moderating effect of real effective exchange rate on current account in the context of Global Value Chain.The third part is the design of real effective exchange rate alternatives,which consists of Chapter 8.Based on the above theoretical and empirical analysis results,GVC participation weakens the moderating effect of real effective exchange rate on current account,and the insufficient moderating effect of real effective exchange rate on current account can be solved by incorporating GVC participation into the calculation of real effective exchange rate.In the traditional real effective exchange rate,the weight matrix of gross trade is adjusted to the weight matrix of value-added trade.At the same time,the heterogeneity of different domestic industries’ participation in GVCS is considered.The fourth part is the conclusion of this paper,which consists of Chapter 9.This paper draws the following conclusions :(1)under the participation of global value chain,whether it is in the way of forward link participation,that is,domestic added value extends to more production links through re-export;The participation mode of backward linkage,that is,import for export,provides opportunities for domestic factor resources to participate in the international division of production.Therefore,whether it is forward linkage or backward linkage,GVC participation can increase the current account balance of a country.(2)With the increase of participation in global value chain,the proportion of intermediate goods trade in the total import and export trade is increasing,so the exchange rate pass-through of import price increases,and the exchange rate pass-through of export price decreases.(3)In the moderating effect of real effective exchange rate on current account balance,in the case of forwardlinked global value chain participation,the downstream links form demand shocks to domestic exports through bullwhip effect,the exchange rate pass-through effect of domestic export prices decreases,and the elasticity of export volume to exchange rate decreases;Backward link of global value chain to participate in the case,every link of the upstream supply shocks are formed by marginal cost effect to their import,domestic currency transfer utility import prices are rising,imports of transfer of flexible exchange rates drop,eventually participate in global value chain by reducing the rate of current account adjustment to improve its current account balance.In view of the above analysis conclusion,promote the export of Chinese status in global value chain division of stable,improve the RMB exchange rate formation mechanism,reform Suggestions,such as external sector statistics accounting and its implications for the global value chain to participate in the monetary policy effect,the real effective exchange rate of the influence of the global value chain are denominated in currency,as well as the industry level problem such as the calculation of real effective exchange rate,Further research directions are proposed.Possible innovations of this paper include :(1)incorporating GVC participation into the macro analysis framework.This paper will contact intermediates downstream products into the general equilibrium model of the equilibrium price,on the basis of general into exports as a function of price,exchange rate,and participate in global value chain,built up prior to contact the global value chain to participate in,and exports to contact after engaging in global value chain and a function of imports,Finally,through the current account balance is equal to the difference of total imports and exports,namely net exports,the different participation modes,exchange rates and current accounts of GVCS are brought into the same theoretical analysis framework.(2)Study current account imbalance and incomplete exchange rate pass-through from the perspective of global value chain.Although the current account and capital account in the balance of payments relations belong to the two sides of the same coin,but from the capital account,especially the perspective of capital flows to explain global imbalances of the United States for the dollar as an international currency is more convincing,especially to explain as an international currency,the dollar how to make the United States as the world’s largest deficit;But it is less convincing for Germany,Japan and manufacturing-oriented countries such as China.At the same time,it is noted that a significant common feature of these manufacturing-oriented countries is their deep participation in the global division of labor,hence the existence of an explanation of international trade on current account imbalances,namely global value chains.In addition,both about the document of exchange rate transmission for exchange rate drops transfer effect tend to associate it with the explanation of energy products in associated fall in the proportion of total imports,and monetary integration,such as the establishment of the euro zone,or that the exchange rate transmission rate decline is due to increased competition in international trade,in this paper,the effect of exchange rate transmission down the interpretation of the global value chain are given.Note the expenditure conversion effect of exchange rates on the current account,thus linking GVCS,exchange rate pass-through,and the current account.(3)Revise IMF’s external balance assessment model in the aspect of empirical analysis.The IMF’s external balance evaluation model(EBA)is the analysis of current account imbalances is the most mature model,the model would be likely to affect the current account of the cyclical factors,policy factors,as well as macroeconomic fundamentals are included in the empirical model,however,no rapid development in recent years include the global value chain,Therefore,in the standard external balance assessment model,this paper brings forward and backward linked GVCS into the model framework respectively,and empirically analyzes the impact of different participation modes of GVCS on the current account balance.(4)Calculate the real effective exchange rate of GVCS based on value-added trade.The traditional real effective exchange rate index is mainly calculated by the International Monetary Fund(IMF)and the Bank for International Settlements(BIS)and released regularly,which is used to measure the international competitiveness of a country or region’s export products.In terms of trade weight,the index simply calculates the total trade weight,In other words,the import and export volume of a certain country accounts for the total import and export volume of the country as the weight,thus ignoring the trade of intermediate inputs included in the total value trade,namely the participation in global value chain trade.With the increasing proportion of intermediate input trade in total trade,the traditional real effective exchange rate will be less accurate in assessing the international competitiveness of a country’s export products.There is a general tendency of overestimation for backward countries participating in GVCS,and an underestimation for forward countries participating in GVCS.Therefore,this article will be added value of a country’s export products include home the country’s total exports increase proportion of weight as a trade,which are used to contact the global value chain to participate in the way for a higher weight,and for future contact to participate in the global value chain of countries give a lower weight,improve the traditional real effective exchange rate of current account adjustment malfunction. |
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