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Low-End Lock-In of Chinese Equipment Manufacturing Industry and the Global Value Chain

Author

Listed:
  • Yan Li

    (School of Economics and Management, Dalian Maritime University, Dalian 116026, China)

  • Huiying Sun

    (BOE Technology Group Co., Ltd., Beijing 100000, China)

  • Jincheng Huang

    (School of Social Science, Nanyang Technological University, Singapore 637598, Singapore)

  • Qingbo Huang

    (School of Economics and Management, Dalian Maritime University, Dalian 116026, China)

Abstract

This paper focuses on the low-end lock-in problem faced by China’s equipment manufacturing industry, which is heavily involved in the global value chain (GVC). Specifically, we use the production chain length system and total trade accounting framework to measure some physical and economic location indicators. The physical location measures the forward production length, backward production length, and the location index, whereas the economic location measures various types of value-added in industry exports. The results show that China’s equipment manufacturing industry has deepened its physical and economic low-end lock-in with the gradual deepening of China’s equipment manufacturing industry’s participation in GVC. From a segmented perspective, the manufacture of fabricated metal products (except machinery and equipment) and electrical equipment has the deepest degree of low-end lock-in physical location; the manufacture of computer, electronic, and optical products has the deepest degree of economic low-end lock-in. Therefore, China should accelerate its breakthroughs in the low-end locking dilemma and climb the GVC by adopting various measures such as accelerating the implementation of the intelligent manufacturing strategy, developing service-oriented equipment manufacturing industries, cultivating the domestic market, realizing low-carbon manufacturing, and improving enterprises’ independent innovation capabilities.

Suggested Citation

  • Yan Li & Huiying Sun & Jincheng Huang & Qingbo Huang, 2020. "Low-End Lock-In of Chinese Equipment Manufacturing Industry and the Global Value Chain," Sustainability, MDPI, vol. 12(7), pages 1-25, April.
  • Handle: RePEc:gam:jsusta:v:12:y:2020:i:7:p:2981-:d:342975
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    Cited by:

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    2. Zhang, Chuanguo & Yu, Xiaoxue & Zhou, Juncen, 2024. "China's embodied oil outflow in GVC participation: Patterns and drivers," Resources Policy, Elsevier, vol. 91(C).
    3. Jingquan Chen & Shiqi Zhang & Xiaojun Ma & Xue Zhao & Yanqi Song & Yijie Fan & Yuanbo Yu, 2023. "Global Value Chains Embedding and Carbon Productivity of China’s Manufacturing Industry: Direct Influence, Adjustment Effect, and Heterogeneity Analysis," Sustainability, MDPI, vol. 15(17), pages 1-28, September.

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