Social Sciences in China (Chinese Edition)

No.4, 2019

The Effect of Value-Added Trade on Global Economic Linkages

(Abstract)

Yang Jijun

Using an added value accounting framework, we conducted empirical research to analyze the added value of products in accordance with the principle of value-sourcing and value-absorption areas and to decode the “riddle of the coupling of trade and the economy.” As our study shows, value-added trade can provide a significant positive stimulus for economic coupling, but it is marked by asymmetry between hub and spoke countries, with the former having a pivotal role. Our analysis of cohesive subgroups indicates that cohesive subgroups and value-added trade are complementary. When bilateral countries belong to the same subgroup, the intensity of their value-added trade exerts an increasing influence on economic coupling. China has adopted a non-equilibrium opening up strategy and has actively boosted value-added coupling with hub countries; its utilization of the associated effects of economic growth will enable it to achieve convergence with the growth of high-income economies. At the same time, China is taking advantage of core linkages in the Belt and Road trade network, continuing to boost Belt and Road construction, providing channels for countries along the Belt and Road to integrate into the global value-added system of division of labor, and building a global economic environment that features win-win collaboration and the development of linkages.