The Role of China in International Fragmentation and Production Network: An Empirical Investigation

초록

Many studies have found that China’s increasing integration into the world economy has facilitated greater fragmentation of production among Asian countries. Despite the central role of China in parts and components trade, most previous studies on China’s components trade have been limited to a particular country or some specific industries. The central objective of this paper is to provide a complete description of China’s parts and components trade. In order to achieve this goal, we systematically separate intermediate goods (parts and components) and final goods from manufactured trade flows, and give a description of the pattern and trends of parts and components trade of China for the period 1992-2009. We then estimate the gravity model augmented with regional dummy variables to examine the determinants of China’s trade in parts and components and to assess whether China enjoys intense linkages in trade in parts and components with other East Asian countries. We find that China’s parts and components trade has increased steadily, in parallel with the growing volume of China’s world trade. Second, the share of parts and components in China’s imports is much greater than the world average level. In combination with China’s role as a globally significant exporter of final goods, this suggests that China is a major a world production center. Finally, China’s parts and components trade has a relatively high degree of regional concentration. ASEAN, Japan, Korea, EU, and NAFTA are China’s major trading partners. Another finding is that China’s trade linkages with these countries, in terms of imports, are stronger for parts and components than for final goods, suggesting that China is closely linked with these country groups in the international production network.

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