Trade Barriers and Participation in the Global Value Chain: An Empirical Study Based on Anti‐dumping toward China

• Author: Zhexi Liu,Chunming Zhao,Xiaosong Wang,Yue Lv
• Date: 01 March 2019
• Published date: 01 March 2019
• DOI: http://doi.org/10.1111/cwe.12276

China & World Economy / 86–106, Vol. 27, No. 2, 2019

86

©2019 Institute of World Economics and Politics, Chinese Academy of Social Sciences

*Xiaosong Wang (corresponding author), Professor, School of Economics, Renmin University of China.

Email: xiaosong10@sina.com; Zhexi Liu, Assistant Professor, School of International Trade and Economics,

University of International Business and Economics, China. Email: liu_ruc@126.com; Yue Lv, Associate

Professor, China Institute for WTO Studies, University of International Business and Economics, China.

Email: nklvyue@126.com; Chunming Zhao, Professor, Business School, Beijing Normal University, China.

Email: Cmzhao@bnu.edu.cn. The authors acknowledge financial support from the Major Program of the

National Social Science Fund of China (No. 17ZDA097) and the National Natural Science Foundation of

China (Nos. 71673280 and 71873031).

Trade Barriers and Participation in the Global Value Chain:

An Empirical Study Based on Anti-dumping toward China

Xiaosong Wang, Zhexi Liu, Yue Lv, Chunming Zhao*

Abstract

This paper investigates the effects of trade barriers on China’s participation in the

global value chain (GVC) using a thorough decomposition approach for trade volume,

total exports, nal exports and intermediate exports. Our econometric results indicate

that anti-dumping (AD) measures initiated by trade partners have restrained the process

of China’s participation in the GVC. From 2000 to 2014, AD measures reduced the

foreign value-added rate of total, nal and intermediate exports by 4.5 to 28.7 percent,

3.4 to 17 percent and 1.2 to 8.5 percent, respectively. In addition, suffering the effects

of AD measures, China’s GVC position index declined by 8.2 percent to 28.6 percent

during this period. Moreover, AD measures have increased industries’ upstream index by

3.2 to 13.7 percent over the same period. These results imply that both the petition and

approval of AD cases has had a negative inuence on the extent and position of China’s

GVC participation.

Key words: anti-dumping, foreign value-added rate, global value chain, technology

upgrading

JEL codes: F10, F13, F14

I. Introduction

The rapid development of economic globalization has revealed an important feature in

the international division of labor, namely, that the production process contains several

subprocesses and is distributed among different countries. Thus, a division system

consisting of different processes, sections and links is formed. This division of the

Trade Barriers and Participation in the Global Value Chain 87

©2019 Institute of World Economics and Politics, Chinese Academy of Social Sciences

production process into different segments all over the world is known as the global

value chain (GVC).

China has made remarkable achievements in foreign trade over the past 30 years by

adopting an opening-up policy, taking comparative advantages and rationally allocating

resources.1 Foreign trade has enabled China to obtain vast economic benefit and to

promote sustainable economic growth. China’s foreign trade has shown two distinctive

characteristics: the degree of Chinese enterprises’ participation in the GVC is deepening

and, at the same time, trade barriers from trade partners have become ever more serious.

On the one hand, the vigorous development of China’s foreign trade, along with

the expansion of economic globalization and information technology and the global

distribution of elements led by transnational corporations, has formed new production

and trade patterns. This global distribution has also increased the depth and breadth

of China’s participation in the GVC, making China an important part of the world

economic system.

On the other hand, Chinese goods are facing increasing worldwide trade barriers.

Since 2000, anti-dumping (AD) cases against China have accounted for more than

one-fifth of the global total. A considerable number of AD cases against China have

eventually led to the imposition of AD duties by other countries (Table 1).

Table 1. Trade Partners’ Anti-dumping toward China and China’s Participation

in the Global Value Chain, 2000–2014

Year Number of

petitions for

dumping

Number of

approvals for

dumping

Number of

cases with

injury decision

Average duty rate

(%)

Foreign value-

added rate of

manufacturing

(%)

2000 43 34 31 33.03 16.92

2005 53 42 42 24.80 23.14

2006 73 67 37 17.47 23.25

2007 61 52 46 58.13 23.65

2008 78 70 54 61.98 22.17

2009 78 75 57 53.01 18.53

2010 44 58 56 34.04 20.51

2011 51 37 37 33.24 20.34

2012 56 49 48 41.05 19.02

2013 71 67 65 38.67 18.53

2014 60 62 57 52.51 16.72

Sources: Anti-dumping data was calculated based on raw data from World Bank’s Temporary Trade Barrier

Database; the foreign value-added rate is calculated based on data from the World Input–Output Database.

1China in this paper refers to the Chinese mainland.