|Title||[IDE] China's Regional Economies and Value Chains: An Interregional Input-Output Analysis|
|Venue||Bo Meng, Yaxiong Zhang, Jiemin Guo, and Yong Fang|
Since the launch of the Reform and Open-Door Policy in 1978, China has registered a high level of economic growth. Its accession to the WTO in 2001 brought a dramatic change to the global trade structure. Attempts to understand China’s role in global value chains have often noted the case of Apple's iPhone production, in particular the fact that the value added during the Chinese portion of the iPhone’s supply chain is no more than 4%. However, when we examine the Chinese economy as a whole in global production networks, China’s share in total induced value added by China’s exports of final products to the USA is about 75% in 2005. This leads us to investigate how Chinese value added is created and distributed not only internationally but also domestically. To elucidate the increasing complexity of China’s domestic production networks, this paper focuses on the measure of Domestic Value Chains (DVCs) across regions and their linkages with global markets. By using China’s 1997 and 2007 interregional input-output tables, we can understand in detail the structural changes in domestic trade in terms of value added, as well as the position and degree of participation of different regions within the DVCs. We can also use our measurements to discuss China's regional economic performance and policy orientation.