CO_2 Emissions Embodied in China's Foreign Trade:An Investigation from the Perspective of Global Vertical Specialization

In light of the growth in vertically specialized in global trade, the present paper uses input output tables from the World Input-Output Database to construct an environmental multi regional input-output model to calculate the CO2 emissions embodied in China＇s international trade during 1995-2009. The advantage of this model lies in its incorporation of the re exported CO2 emissions component embodied in trade and its ability to differentiate domestic sourced CO2 emissions from foreign-sourced CO2 emissions in trade. The results show that carbon emissions embodied in both China＇s exports and imports increased significantly during 1995-2009. One important reason for this is that the re-exported carbon emissions embodied in China＇s imported intermediate inputs increased substantially during this period. Our research reveals that accelerating the transformation of trade pattern and upgrading processing trade should be emphasized in the formulation of policy to prompt CO 2 emissions abatement in China.

Vertical Specialization and Trade Growth in Northeast Asia

As the global economy has become further integrated, the international production chain has become more sophisticated, with diversified stages of production located in different countries. Economic theorists have argued that the fragmentation of the global production chain is partly attributable to the high growth in international trade over the past several decades. In this study, we examine vertical specialization in China, Japan and Korea, and its contribution to these nations＇ trade. Using a multilevel model, it is illustrated that vertical specialization has encouraged increases in trade among all three countries. In particular, China ＇s outcome is remarkable considering how recently it became a member of the WTO.

Technological Sophistication of China's Industrial Finished Goods for Export——A New Approach to Estimation

Based on the perspective of international vertical specialization,this paper creates a set of new approach to estimating the domestic technological sophistication(DTS)of export goods.Deducting the values of imported intermediate inputs contained in export goods,this paper conducts an estimation and analysis of the DTS of China's industrial finished goods for export between 2002 and 2007 at the national,industrial and regional levels.Results of our study indicate that:(1) the DTS of China's export goods demonstrates an overall tendency of steady increase and its evolving pattern demonstrates distinctive differences across sectors;(2) the DTS is on the increase for natural resources sectors,low-technology sectors,medium-technology sectors and certain high-technology sectors including transportation equipment manufacturing,general and dedicated equipment manufacturing,and electrical machinery and apparatus manufacturing while the DTS is on the significant decrease for electronic and communication equipment manufacturing and instruments,meters and other metering devices manufacturing;and(3) provinces with relatively high average values of DTS of export goods are primarily located in China's eastern region while provinces with significant DTS growth rates are mainly located in China's central and western regions and the gaps of DTS of export goods among China's eastern,central and western regions have a tendency of convergence.

How Does the Regional Comprehensive Economic Partnership Affect the Restructuring of Global Value Chains?

This paper quantifies the way in which the Regional Comprehensive Economic Partnership(RCEP)afects the restructuring of global value chains(GVCs).It incorporates an inputoutput structure into a general equilibrium model,highlighting important differences between intermediates and final goods.Using tarif reduction schedules for the RCEP agreement and Asian Development Bank Multi-Region Input-Output database,it evaluates the impact of the RCEP's tariff cuts on vertical specialization and the GVC position index of members.It shows that the RCEP significantly increased vertical specialization and the weighted average number of stages for members for primary factors of production and final consumption,which led to more complex and longer production chains.This was mainly due to the trade creation in intermediates imported from member countries and those outside it.This is an important finding,distinct from traditional trade models without aninput-output structure.

Foreign Value-added in China's Manufactured Exports:Implications for China's Trade Imbalance

Economists have recently become interested in weighting how much domestic value-added is actually included in China＇ s exports. Formally, the proportion of foreign and domestic contents could be identified by calculating the vertical specialization share using noncompetitive input-output tables. Applying such a method to the Chinese case, however, would result in a big measurement bias because China has a large share of processing exports, which utilize a disproportionately high percentage of imported intermediates. This paper, by directly employing 2008 trade data for which imported intermediates in both processing and non-processing trade could be identified by means of various trade patterns, provides a simplified way to estimate the share of foreign/domestic value-added included in industry-level manufactured exports. This paper finds that the vertical specialization share of China＇ s processing exports was about 56 percent in 2008, compared to about 10 percent for ordinary exports. It also finds that the sectors that experienced fast expansion of processing exports have a much higher share of foreign contents. Since processing exports accoant for about half of Chinese exports, the prevailing trade statistics, which focus on gross values rather than the value-added of exports and imports, has obviously overstated the bilateral trade imbalances, especially between China and the USA.