China continues to move up in global value chains: AIIB report

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The new AIIB headquarters site near the Olympic Forest Park in Beijing Photo: cnsphoto

China continues to integrate into global value chains (GVCs) and can capitalize on a higher participation rate in these GVCs to accelerate its recovery from the COVID-19 pandemic, according to the 2021 Asian Infrastructure Finance (AIF) report ) published by the Asian Infrastructure. Investment bank (AIIB) Wednesday.

China’s economy is undergoing a fundamental transformation, and by continuing to maintain its economic openness and links to global supply chains despite headwinds, it can greatly contribute to regional economic growth and prosperity, said Erik Berglof. , AIIB Chief Economist, at a webinar on Wednesday.

China’s GVC exports as a percentage of total exports – the GVC participation rate – increased from 37.9% in 2000 to 44.6% in 2019. The change implies that China is moving towards a more upstream position in the GVCs. CVM, in line with the transition to the status of a global sourcing hub in GVC networks, read the report.

Among Chinese GVC exports, the contribution of high-tech manufacturing has increased significantly, indicating a sign of its modernization.

China’s participation rate in GVCs continued to increase in 2021. But the specific value needs to be calculated, Zhao Changwen, president of the Center for International Knowledge on Development (CIKD), told the seminar on Wednesday.

Zhao noted that industrial chains emphasize the global division of labor, and supply chains focus more on efficiency and safety, while value chain is more about the distribution of interests. The three chains must be considered in a holistic way.

“Targeting activities that will decarbonize and green its supply chain will offer the greatest potential to strengthen China’s competitiveness going forward,” said Berglof.

Analysts at the seminar said China has also helped build advanced infrastructure in many developing countries.

Potential demand from China has helped developing economies catch up around the world. Developing countries should invest in infrastructure to see the opportunities presented by the rise of China, said Jang Ping Thia, senior economist and director of the AIIB’s economic department.

Within two decades, China will likely have the largest middle class in the world, larger than the United States and the EU combined, he noted.

Xin Xiuming, vice president of the China International Contractors Association, said infrastructure can accelerate the participation of developing countries in global industry and supply chains, and the idea of ​​infrastructure connectivity for free trade. hindrance of the Belt and Road initiative aims to accelerate this process. .

Xin said infrastructure contracts signed by the association from January to October reached $ 172.5 billion, up 3.6% year-on-year.

“China’s infrastructure projects are developing mainly in Asia, Africa and Latin America, after facing political obstacles when they moved to developed countries,” Xin said.

By promoting an open global economy and increasing imports through big events such as the China International Import Expo, China has made real contributions to the world, said Bu Wentao, director of the investment division of the research department, on Wednesday. policy of the Ministry of Commerce. .

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