Global Value Chain Development Report 2021:

Abstract

Creative Commons Attribution-NonCommercial 3.0 IGO license (CC BY-NC 3.0 IGO) © 2021 asian Development bank, Research institute for Global Value Chains at the university of international business and economics, the World trade organization, the institute of Developing economies -Japan external trade organization, and the China Development Research Foundation. iSbn 978-92-9269-090-8 (print); 978-92-9269-091-5 (electronic); 978-92-9269-092-2 (ebook) publication Stock no. tCS210400-2 Doi: http://dx.doi.org/10.22617/tCS210400-2 this work is a product of the asian Development bank, the Research institute for Global Value Chains at the university of international business and economics, the World trade organization, the institute of Developing economies-Japan external trade organization, and the China Development Research Foundation. it is based on joint research efforts to better understand the ongoing development and evolution of global value chains and their implications for economic development. the views expressed in this work are those of the individual chapter authors and do not necessarily reflect the views and policies of the copublishing partners, their boards of executive directors or governors, or the governments they represent, nor that of the institutions with which the individual authors may be affiliated, including tsinghua university and the brookings institution. the copublishing partners do not guarantee the accuracy of the data included in this work and accept no responsibility for any consequence of their use. the mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by the copublishing partners in preference to others of a similar nature that are not mentioned. by making any designation of or reference to a particular territory or geographic area, or by using the term "country" in this work, or the boundaries, colors, denominations, and other information shown on any map in this work, the copublishing partners do not intend to make any judgments as to the legal or other status of any territory or area.

Risks and opportunities of reshaping global value chains

“…The structure of networks determines potential GVC vulnerabilities and propensity to amplify shocks. Network analysis helps identify the importance of a country or sector in the GVC networkthe so-called centralityby accounting for the direct participation of countries in GVCs and also for the participation of their value-chain partners (Criscuolo and Timmis, 2018 [36]; Cingolani, Iapadre and Tajoli, 2018 [37]; Altomonte, Colantone and Bonacorsi, 2018 [38]; Arriola et al, 2020 [23]). The higher the centrality indicator, the greater the importance of a country/industry as a supplier or customer in the network and the larger potential to propagate shocks.…”

“…The increasing reliance on intermediate inputs facilitated by GVC integration spurs economic growth, leads to denser production networks and reduces all prices (Acemoglu and Azar, 2020 [59]). According to some simulations, the quantitative effects of higher volatility are not guaranteed and are small in relation to efficiency gains (Arriola et al, 2020 [23]; D'Aguanno et al, 2021 [48]).…”

“…However, in most cases, self-sufficiency or domestic production does not imply robustness of value chains (Miroudot, 2020[60]). Moreover, several model simulations considering different re-shoring scenarios show that re-shoring does not guarantee to achieve this goal, in contrast to diversification and can imply significant welfare losses (D'Aguanno et al, 2021 [48]; Eppinger et al, 2021 [61]; Arriola et al, 2020 [23]; Sandkamp, 2022 [62]). Re-shoring is just likely to shift the relative importance of domestic versus foreign shocks.…”

“…Many governments maintain stockpiles of critical supplies such as fuel and medical supplies. 23 Countries should strive to ensure that their national stockpiling strategy aligns with the requirements of their supply chains and that the contents of stockpiles are updated to reflect the demands of industry. In Japan, the Japan Organization for Metals and Energy Security oversees the National Rare Metal Stockpiling Project in collaboration with industry as a safeguard against interruption of supply.…”

Mismatched Social Welfare Allocation and PM2.5-Related Health Damage along Value Chains within China

“…During recent decades, emerging inter-regional trade with the expansion of global value chains led to an increasingly complex inter-regional production network. , Entities at different positions along the value chain provide diversified products and services (i.e., raw material and intermediate products for further production, manufacturing, and services for final products) . It is suggested that participating in the value chain promotes social welfare growth (such as higher salary, more job opportunities, and more public revenue) by improving the efficiency and quality of production and supply; , however, the social welfare gains are not allocated evenly among different participants, and varying degree of external losses (e.g., environmental damage) also occur in various production stages, delivering the uneven gains and losses allocation along the value chain.…”