Measuring Global Supply ChainVulnerabilities Using Trade NetworkAnalysis Method

Cui Xiaomin, Xiong Wanting, Yang Panpan*, and Xu Qiyuan

Institute of World Economics and Politics (IWEP), Chinese Academy of Social Sciences (CASS), Beijing, China

Abstract: With the trade network analysis method and bilateral country-product leveltrade data of 2017-2020, this paper reveals the overall characteristics and intrinsicvulnerabilities of China’s global supply chains. Our research finds that first, most globalsupply-chain-vulnerable products are from technology-intensive sectors. For advancedeconomies, their supply chain vulnerabilities are primarily exposed to political andeconomic alliances. In comparison, developing economies are more dependent on regionalcommunities. Second, China has a significant export advantage with over 80% of highlyvulnerable intermediate inputs relying on imports of high-end electrical, mechanical andchemical products from advanced economies or their multinational companies. China alsorelies on developing economies for the import of some resource products. Third, duringthe trade frictions from 2018 to 2019 and the subsequent COVID-19 pandemic, there wasa significant reduction in the supply chain vulnerabilities of China and the US for criticalproducts compared with other products, which reflects a shift in the layout of criticalproduct supply chains to ensure not just efficiency but security. China should address supplychain vulnerabilities by bolstering supply-side weaknesses, diversifying import sources, andpromoting international coordination and cooperation.

Keywords: Supply chain vulnerabilities, trade network analysis, export centrality

JEL Classification Code: F10, F14

DOI: 10.19602/j.chinaeconomist.2023.01.05