The Analysis Of Influencing Factors Of China's Domestic Value Added

In recent years,China continues to integrate into the global production system.According to the traditional method of trade statistics,the growth rate of China's export has reached nearly 20%per year,and became the largest trading nation in the world in 2013.China's export ranks first in the world in terms of quantity,but in the respect of quality,is China's export also comes first?In the background of the global division of labor and product trade,the vertical specialization continues to deepen.At this time,if we still use the traditional statistical method(use the total export as statistical standard)to measure a country's export performance is inappropriate,because the traditional statistical method can not accurately reveal the actual trade share a county acquires in the background of the global division of labor and product trade.However,if we use the method of trade statistics based on the added value,then we can truly reflectthe situation of a country's export.Because this method takes the increased value made by the manufacturer as standard,and through the calculation of value added,the domestic manufacturing parts and nondomestic manufacturing parts in the export will be separated.Therefore,from the standpoint of value added,the analysis of China's export and factors which influence the domestic value added of China is very necessary.Based on the theories of value added,this paper used the Tiva database issued by the OECD and WTO to do a series of analyses.First of all,we measured the overall changes of China's export,domestic value added continued in the export as well as the distribution of both in time and space.Besides,we have made a comparative analysis about the domestic value added of agriculture,mining,nine manufacturing industries and seven service industries,and did a comparison between the trade balance based on the total exports and the trade balance based on the domestic value added.What's more,we contrasted the comparative advantage based on the total exports and the comparative advantage based on the value added.The results show that:Firstly,The domestic value added embodied in the export of China is not high,and the proportion of domestic valued added to the export of China is far less than the one of the developed countries like the United States.From the view of industries,the domestic value added of manufacturing of China is much higher than the service industry,whose domestic value added,in a large extent,is higher than agriculture and mining.But the proportion of domestic valued added to the export of manufacturing is lower than the one of agriculture,mining and service industry.Secondly,According to the domestic value added,the competitiveness of China's manufacturing is not strong,and the huge trade surpluses between China and its trading partners is an illusion.At last,we expanded the gravity model of trade,and chosen the data of the domestic value added of China exported to 34 OECD members and 18 non-members to explore which factors will influence the domestic value added.Then we achieved four main conclusions as bellows:Firstly,The nominal GDP of China's trading partners and the proportion of China's R&D to trading partners' R&D both have significant and positive correlations with the domestic valued added of the export of China.Secondly,Foreign direct investment to China has been divided into three samples for analyses.Among them,for the total sample and the sample of high-income countries,the foreign direct investment to China did not have an impact on China's domestic value added of the export.And for the middle-income countries,the foreign direct investment to China could significantly enhance China's domestic value added of the export by increasing the R&D investment of China.Thirdly,Foreign direct investment from China has also been divided into three samples for analyses.Among them,for the total sample and the sample of high-income countries,when the foreign direct investment from China increased,the domestic value added of China would not increased accordingly.Nevertheless,for the middle-income countries,the foreign direct investment from China could promoted the domestic value added of China slightly by increasing the R&D investment of China.Finally,The population of China's trading partners had no remarkable effect on China's domestic value added.At the last part,this paper put forward some policy recommendations,which including two aspects.On the one hand,we should use the method of trade statistics based on the value added to illustrate the export situation of China,and take advantage of the theory of value added in the foreign anti-dumping lawsuits and national negotiations.On the other hand,in order to promote the domestic value added of China,the enterprises should pay attention to innovations,and increase the investment in research and development.At the this time,from the aspect of foreign direct investment to China and foreign direct investment from China,we following suggestions are given:implementing some favorable policies to the key industries;introducing moderately some multinational enterprises which have a moderate technology gap with China;improving the foreign investment policy to avoid the centralization of foreign investors;improving the proportion of China's foreign investment in high-tech industries;transferring China's comparative disadvantage industries or industries in excess of production capacity to other countries.