Trade Benefits and Environmental Costs of GVCS: A Case Study of the BRICS

As the international trading system has developed with the division of Global value Chains (GVCS), the export trade of Brazil, Russia, India, China, and South Africa (BRICS) has grown rapidly. The resulting growth of carbon emissions has drawn wide attention from the international community, necessitating the comparison of the trade benefits and environmental costs of the BRICS participation in GVCS. Based on the Eora database, this paper constructs a decomposition framework for the calculation of export value-added and embodied carbon, based on a multi-region input-output (MRIO) model. The trade benefits and environmental costs paid by the BRICS’ total exports from 1990 to 2015 were measured and the imbalance was analyzed, along with the causes. The results show that the main value-added and carbon embodied in the BRICS’ exports originate from their own countries, and the domestic value-added content of the BRICS’ exports decreased while the foreign value-added content increased.

Is Bilateral Value Added in Trade between China and EU Countries Efficient?

By applying stochastic frontier analysis,and replacing total export with value added in exports as a more accurate measure of domestic content embodied in exports,we estimate the trade efficiency between China and EU countries and analyze the determinant factors.The results show that the value added in trade between China and EU countries is running at a low level of efficiency,and the trade efficiency has an obvious imbalance between export and import.Our calculation of unexplored trade potential indicates that western EU countries,such as France,Germany,Italy,and Spain together are China 5 top trading partner with the highest unexploited trade potential.Based on the principal component analysis of 14 trading-related variables,trade efficiency determinant results show that the tangible trade infrastructures of both exporter and importer matters most,including airports,container shipping,Internet,and broadband infrastructures.Meanwhile,intangible trade infrastructures,including customs procedures and domestic business environments,has a significant,but smaller influence on trade efficiency.Our important findings shed light on practical trade policymaking to encourage Sino-EU trade collaboration.

Dynamic Changes of China’s Functional Specialization in Export and International Comparison under Global Value Chains

The functional specialization in export of a country(and its sectors)in different activities,such as fabrication,R&D,management and marketing,is crucial to its governance and control on the value chains,which magnifies the shortage of the existing aggregate value added studies on our understanding of global value chains(GVCs).Considering production fragmentation at both the spatial and functional levels,this paper defines the modified functional specialization indicators at the national and sectoral levels from the forward linkage(rather than backward linkage).Based on the World Input-Output Database together with the newly compiled Labor Occupations Database,this paper re-estimates and analyzes the functional specialization and changes in China and major developed economies’exports.The results show that China’s export is mainly specialized in fabrication activity,which is among the world leading level,while it is weak in headquarter activities(especially R&D and management),which is almost locked at the lowest level in the world and could not pose an export threat to the developed economies.China’s manufacturing basically follows the functional development path of“relying on fabrication,entering market,targeting management and R&D”,featuring the coexistence of“strong”fabrication and“weak”management and R&D.The fabrication specialization of the typical processing sector“electronic and optical equipment”has reached the international leading level.The level of functional specialization of China’s service industry is generally lower than that of manufacturing and generally lags behind in the world,indicating that China still has a long way to go before becoming a major power of service in the world.Finally,this paper proposes policy implications and further researches that can be extended.