Territory-based and Ownership based Gains from Trade under the Global Production Network* – An Empirical Study Based on China

Li Feng (黎峰)
Shanghai Academy of Social Sciences, Shanghai; Jiangsu Provincial Academy of Social Sciences, Nanjing, China

 
Abstract: Under global production network, export cannot represent a country’sgains from trade, and territory-based gains from trade refer to the remainder of exportafter deducting the input of intermediate goods and re-export after value-added return.Ownership-based gains from trade refer to the remainder of territory-based gains fromtrade after further deducting the trade in value added (TVA) realized through the inflow offoreign factors. By creating a multicountry input and output model, this paper calculatesthe territory-based gains from trade, ownership-based gains from trade, and territory-basedgains from trade for foreign countries realized through China’s export, as well as valueadded return and territory-based gains from trade for foreign countries realized throughChina’s import. This paper has arrived at the following conclusions: behind China’s statusas the largest goods exporting country in the world, most of Chinese exports contribute tothe gains of foreign countries; value addition for foreign countries realized through China’sexport and value-added return realized through China’s import mostly come from Taiwanregion, Japan and South Korea in East Asia; a considerable part of gains from trade for theUnited States realized through China-US trade is achieved through indirect trade.
Keywords: global production network, territory-based gains from trade, ownership-basedgains from trade, gains from trade for foreign countries

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