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Value Added Decomposition of Chinese Provincial Exports and Its Assessment of True Comparative Advantage: A Case Study of Manufacturing in Jiangsu Province

DOI: 10.4236/jss.2019.73032, PP. 380-399

Keywords: Value Added Decomposition, Comparative Advantage of Value Added, Jiangsu Manufacturing, Regional Association, Value Chain

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Abstract:

The Sino-US trade conflict, the collapse of economic globalization and the reconstruction of global value chains have enhanced the necessity and urgency of building an open and connected, self-controllable, domestic value chain. Jiangsu is a major province and a large open province. The goal, path and measures for Jiangsu to build an independent and controllable advanced manufacturing system will have typical reference value. Based on the KWW trade value added decomposition framework, the World Input-Output Table (WIOT) and the inter-regional input-output tables of 30 provinces in China, Jiangsu’s return domestic value added, foreign value added, province value added and other provinces’ value added in Jiangsu’s manufacturing exports are estimated. Meanwhile, the regional linkages and changes of Jiangsu’s manufacturing exports with the rest of the provinces are also analyzed. The results show that the value added of imports from Jiangsu exports is higher than that of other provinces, which indicates that the “foreign circulation” of Jiangsu’s economy is stronger than “domestic circulation” though the situation is always changing in recent years. The Yangtze River Delta region is the core space for Jiangsu to build manufacturing industry chain. The Yangtze River Economic Belt and the Huaihai Economic Zone, which is the part of new Silk Road, are two important extended spaces for Jiangsu to build up NVC. Finally, On the basis of the decomposition of export value added, the industries with real comparative advantages in 16 major manufacturing industries in Jiangsu Province are evaluated. Both the advantages and disadvantages of Jiangsu’s value chain upgrading at the industrial level are unveiled.

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