Since the second half of the last century, the development of information technology and reduction of transportation costs have led to huge changes to the international labor division and continuous extension of the production process. Besides, the products have been redistributed globally according to the resources endowment and comparative advantages of different countries and regions, which has brought enormous changes to the economic and social development of all countries around the world. In the globalization process, the total import and export trade volumes of different countries are growing faster than GDP growth, among which the proportion of the intermediate input trade volume is also increasing. Vertical specialization has gradually become a new method for human to organize production activities. Thomas L. Friedman pointed out in his book, The World Is Flat, that the economic globalization which is driven by information technology revolution, trade liberalization and production outsourcing will bring broad prospects of productivity improvement, poverty reduction and wealth increasing to human society. However, with the high praises for globalization, a new trend of “De-globalization” marked by “Brexit” and “Trump’s New Policies” has risen overnight, which, together with the widely prevailing trade protectionism of developed countries, brings uncertainty to the future of globalization. What globalization has brought to China’s economy? What is the future of globalization? How should China react to the uncertainties of globalization? The answers to the above questions are of great significance to China’s economic development.
Based on the data of the World Input-Output Database (WIOD) from 2000 to 2014, the report analyzed the impact of globalization on China’s economy with the following aspects: (1) measuring China’s participation in GVC by constructing the vertical specification index, GVC engagement index and international labor division index; (2) measuring China’s position and status in the GVC specialization by constructing the upstream and downstream index and GVC status index; (3) Establishing Revealed Comparative Advantage Index and analyzing the international competitiveness of China’s industrial sectors from the perspective of traditional trade and intermediate products trade; (4) analyzing the changes in the sensitivity and influence of Chinese economy’s to other countries by constructing the sensitivity and influence index from the perspective of economic spatial correlation; (5) the impact of globalization on China’s economic growth; (6) the relationship between globalization and transformation of China’s industrial structure; (7) analyzing the trend of global economic pattern and performance of China’s economic growth in the globalization process ; (8) proposing policy suggestions on China’s actions in the next round of globalization based on the research conclusions of the “de-globalization” phenomenon and the prospect of globalization.
(Author(s): Liu Ruixiang, Yan Yingen and Dai Feng, Research Group of Yangtze IDEI, Nanjing University)
