The Coordinating Development Of Regional Economy In The Horizons Of The GVC

At the end of 80s and the beginning of 90s,20th century,the whole world has entered the era of globalization by the end of the“Cold War",and the global value chain,GVC,which has become the most characterized phenomenon was borm.Where the GVC conducts growing and evolving,where the international fragmentation,regional separation of product process,and re-location of economic activities with declining of trading cost being reshaped and changed,along with the changing of skills,knowledge,and other personalities of labors.Then,how to solve the `imbalance and inadequate,problems of China in the era of the GVC?The agglomeration model of value chain(AMVC)provides a logic process from micro-level to macro-level to consider the connection between three markets of inputs,finals and labors respectively,that the firm producing final good should consider the substitute relationships of final goods,labors,and intermediate inputs.First of all,between the markets of finals and labors,the most optimal condition for the firm is(?),which low β represents high uniqueness of labors and so does ρ andα of final products and intermediate inputs respectively,then the firm would gain a high possibility to survive in the world market and its profit would benefit both the firm and employees.Second is the relationship between finals and inputs:①when inputs own higher uniqueness,which means ρ>α and α is inputs’ substitute parameter,the firm should outsource all upper-stage suppliers of m ∈[0，mc*),and integrate all lower-stage suppliers of m ∈[mc*,1),②when ρ<α,the firm should integrate all upper-stage suppliers of m ∈[0,mc*),and outsource all lower-stage suppliers of m ∈[mc*,1).At last,as the conditions above satisfied,tech-progressing,trade liberating,cost reducing,labor skills expanding,and competition inclining would all lift labor income and benefit the firm.So that in different condition,the different decisions of labor compensation made by the firm would vary the status of the demands of the labor market,then the balancing of the regional economic switches.These economic patterns revealed the strategies of how to ease the incoordinate of regional economies and how to accelerate the speed of economic integrating:①No matter what,the productivity growth can both lift labor income and ease agglomeration,which let it become the main force of the rebalance strategies.②The homogeneity of goods uniqueness and monopoly power sounds the alarm of the production models such as pursuing only high mark-up,high profit margin,large scale.The long-term mutual benefits emphasize the suitable relationship between labor uniqueness and goods uniqueness,and the short-term mutual benefits emphasize the optimal property-right decisions along the GVC determined by the relationship between input uniqueness and goods uniqueness.③The regionally economic incoordinate is generated by rapid enrichment of population,thus population control is the very fundamental agent of the strategies.④The velocity of income increase determines the direction of population flow,so the control of income velocity is another key agent of rebalance.The present income is the radix and determines the power of the velocity effect,like a spring,the present incomes of developing economies are relatively low and developed ones are high,so the former velocity shows much more power than the latter.In a word,steady growth of labor income can control the regionally economic incoordinate and raise the people’s happiness.⑤The VS is a special production model of the GVC.as the goods uniqueness is relatively low,it should be turned down a little to control the agglomeration.⑥The process stage heterogeneity is one of the heterogeneities of the firms on the GVC,as the goods uniqueness is relatively high,it also should be turned down a little.⑦The trade liberating is the road of destiny to the world-wide integration,so it is the very prior agent of the strategies with no doubt.From the generality to the concreteness,Chinese has its very special personalities,that her high gross-output doesn’t benefit labors yet,her monopoly power is relatively low but incoordinate level is high,and her high productivity doesn’t transform to be high specialization.Except these special personalities,the rebalance strategies above can promote labor income and ease the regional incoordinate in China at the same time.And the special approaches for China is determined by its own ’space of historical possibilities’,as below.Chinese government and producers should ①immediately increase the velocity of labors’ average income,②continuously control population,③groom labors through technical progress.④make operating decisions according to the uniqueness relationship bctween products and materials,⑤ make scale decisions according to the uniqueness relationship between products and labor qualities,⑥promote specialization for higher productive efficiency,and ⑦keep pushing trade liberating,⑧encourage labors to increase their incomes by hard-working,learning,and creating.