CHANGING LANDSCAPE OF GLOBAL VALUE CHAINS: … · 2019. 10. 21. · Introduction Anticipation of...
Transcript of CHANGING LANDSCAPE OF GLOBAL VALUE CHAINS: … · 2019. 10. 21. · Introduction Anticipation of...
CHANGING LANDSCAPE OF GLOBAL VALUE CHAINS: REDEFINING ROLE OF ASIAN
ECONOMIES
Dr Neha Gupta
Fellow
Indian Council for Research on International Economic Relations (ICRIER)
New Delhi, India
Introduction Anticipation of greater consolidation of GVCs post-crisis and faster shifting of powers
from developed North to emerging South (Cattaneo, Gereffi, & Staritz, 2010), with
more challenges for the latter
But trend shows slowing down of GVCs; challenges now more for South to stay
competitive in GVCs, capture high value added shares and adopt to changing digital
technologies and Industry 4.0 (AI, IoT, big data analytics, robotics)
Traditional trade theories fail to explain recent trends
Comparative advantages not only in production tasks, but would be in terms of data
flows, IPR regulation and progression of digitalization (Banga, 2019b)
World trade is under constant uncertainty post-crisis due to rising protectionism, tariff
wars and declining FVA content of exports, but Asia has registered highest regional
trade during 2008-18 (WTO, 2019)
Share of intermediates still stable & significant (export shares: 43% in 2006, 44% in
2017; import shares: 44% and 45% respectively) – Revival of GVCs at slower pace
Share of developing economies increased in global trade, FDI outflows and inflows;
Developing Asia as main drivers of growth in 2018 (WTO, 2019)
2
3
REGIONSExports Imports
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
Developing
economies43.6 43.4 42.4 43.2 43.5 41.0 40.9 39.7 40.7 41.1
Developing
Latin
America
5.6 5.8 5.7 5.8 5.7 6.2 6.3 5.9 5.8 5.8
Developing
Europe1 1.1 1.1 1.1 1.1 1.5 1.5 1.5 1.6 1.4
Developing
Asia26.8 28.9 28.4 28.4 28.1 25.6 25.3 25.0 26.2 27.1
Developed
economies52.4 53.5 54.9 53.8 53.2 56.3 57.0 58.2 57.1 56.6
Shares of regions in world’s merchandise trade (%)
4
A: Shares of countries'/regions' merchandise
intermediate exports in their total merchandise
world exports (%)
B: Shares of merchandise
intermediate imports in total
merchandise exports
(%)
Region/Country 2008 2012 2017 2008 2012 2017
North America 15.1 14.3 13.6 52 51.7 51.5
EU 28 39.8 33.9 33.8 45 42.5 40
Japan 5.9 5.6 4.6 36.3 37 35.9
Developing Asia 23.5 27.2 31.8 37.7 39.3 37.8
Developing South
Asia1.5 1.9 2 41.2 48.8 50.1
Developing
Southeast Asia7.2 8 8.7 52.2 51.5 50.4
Developing East
Asia14.7 17.3 21.2 43.6 43.4 38.7
Shares of regions in Merchandise exports (%)
Objectives and Methodology
To review how GVCs theories have progressed over the years and whether
they have been modelled post-crisis as per changing AI/robotics & digital
economy aspects.
To review, post-crisis foreign trade, FDI and industrial policies of Asian
economies to understand how well they are equipped to deal with changes.
To analyse trends in Asian GVCs in terms of backward and forward
linkages during 2011-16 particularly in comparison with EU and America.
To suggest policy measures to reshape Asia’s role in changing GVCs and
industrial-digital revolution.
Data collected using secondary sources, that is, OECD-WTO TiVA database
(2018) along with Government’s announced policy documents
5
Literature Review and Evolution of GVCs
Began as RSCs in East Asian economy and soon spread to South-East Asia;
China emerged as epicenter of GVCs in Asia (Dickens, 2010; WEF, 2012;
Baldwin, 2012; Banga, 2013)
Conceptually evolved from ‘value chain’ (Porter, 1990), ‘production chain’
(Dickens, 1992), ‘global commodity chains (GCC)’ (Gereffi &
Korzeniewicz, 1994), ‘global production network’ (Henderson, 2002; Coe,
Hess, Yeung, Dickens, & Henderson, 2004), ‘global production sharing’
(Athukorala & Menon, 2010), ‘trade in tasks’ (Grossman & Rossi-Hansberg,
2006; Nathan, 2010), ‘global supply chains (GSCs) and GVCs’ (Gereffi et
al, 2001; Baldwin, 2012; Banga, 2013)
GVCs began in garment and electronics, and soon spread to capital-intensive
industries, mainly machinery (Athukorala & Menon, 2010)
Ultimate gains under GVCs depend on how much value added is exported
by the country (Gupta, 2015; Banga, 2014)
6
Changing Theories of GVCs
Flying-geese theory
Fragmentation theory (Jones & Kierzkowski, 1990; Kimura &
Ando, 2005; Ando & Kimura, 2009)
New Economic Geography (Kimura & Obashi, 2009)
Theory of ‘snakes and spiders’ (Baldwin & Venables, 2013)
Move from trade-nexus to trade-investment nexus, then trade-
investment-services-IP nexus; growing nexus of trade-
investment-services-IP-DT-Industry 4.0
Theory of DT-driven Upgrading in GVCs (Szalavetz, 2019)
7
8
Theory of Snakes and Spiders
9
Traditional Smiley Curve of GVCs (Baldwin, 2012)
10
Smiley Curve after factoring into Digital Economy aspects (Mayer, 2018)
11
Framework of ‘DT-driven upgrading in GVCs’
12
Main Policy Documents of Asian countries post crisisCountry Document
South Asia
India
Foreign trade policy of India (2015-20); ‘Make in India’ Initiative; Foreign trade policy of India (2009-14);
Proposed New Industrial Policy (Yet to be released, in 2019-20); National Manufacturing Policy, 2012 (to be
subsumed into the New Industrial Policy, yet to be released); Consolidated FDI Policy (2017 and 2016 both);
Science, Technology and Innovation (STI) Policy, 2013
Afghanistan
IT Industry Development Policy, 2015-2020; Afghanistan National Peace And Development Framework (ANPDF)
2017 to 2021 – (covers features of trade and investment policy); National Export strategy, 2018-22
Bangladesh
Export Policy 2015-2018; Export Policy 2018-21 (approved by cabinet but yet to be published); Import Policy
2015-2018; Outline Perspective Plan of Bangladesh (2010-2021): Making Vision 2021 A Reality’ (basic document
for National Industrial Policy 2016)
Pakistan
Investment Policy, 2013-2018; Trade Related Investment Policy Framework 2015-23; New Industrial Policy, 2018
by Pakistan Business Council (PBC); Digital Pakistan Policy, 2018; Strategic Trade Policy Framework 2015-18,
STPF 2018-23 (Not yet released)
Nepal
Nepal Trade Integration Strategy (NTIS) 2016; Trade policy 2015; Industrial Policy 2010 (new policy did not come
in public domain after 2010)
Sri Lanka Vision 2025; National Export Strategy of Sri Lanka 2018-2022; New Trade Policy, 2017
Bhutan Economic Development Policy 2016
East Asia
China
Made in China 2025; Foreign Investment Law of the People’s Republic of China (PRC or China) ; New Generation
of Artificial Intelligence Development Plan
Japan
Japan Revitalisation Strategy - Toward the Fourth Industrial Revolution, 2016; Japan Revitalisation Strategy-Japan
is Back, 2013; Growth Strategy, 2019; Foreign Investment Strategy 2018; New Economic Policy Package, 2017
Korea Plan for the Fourth Industrial Revolution, 2017
13
Country Document
South-East Asia
Singapore
Report of the Committee on the Future Economy, 2017 ; Research Innovation Enterprise 2020 Plan
(released in 2016)
Myanmar
Myanmar Investment Promotion Plan 2016/17 - 2035/36; Myanmar Sustainable Development Plan (2018 –
2030); National Export Strategy 2015-2019 (first plan ever); National Export Strategy 2020-2025 (to be
formally released); Myanmar Industrial Development Vision: Next Frontier in Asia: Factory, Farm, and
Fashion (2015)
Cambodia
Rectangular Strategy for Growth, Employment, Equity and Efficiency: Building the Foundation toward
Realizing the Cambodia Vision 2015 (2018); Cambodia Industrial Development Policy 2015 – 2025; Law
on the Investment of the Kingdom Of Cambodia, 1994
Philippines Development Plan, 2017-22; Development Plan, 2014-16
Malaysia Eleventh Malaysia Plan 2016-2020: anchoring growth on people
Thailand The Twelfth National Economic And Social Development Plan (2017-2021); Thailand 4.0 Policy
Vietnam
Vietnam’s Socio-Economic Development Strategy for the Period of 2011-2020; National digital
transformation scheme 2019 (to be launched); Overall strategy for international integration through 2020,
vision to 2030 (approved in 2016); Strategy on exports and imports for 2011-2020, with visions to 2030;
Industrial Development Strategy through 2025, vision toward 2035 (signed in 2014)
Indonesia Long-Term National Development Plan Of Indonesia (RPJPN), 2005-2025
Main Policy Documents of Asian countries post crisis
Asian Changing Policies EA re-invented trade and industrial policies post-crisis to revive economy and not
lose share in GVCs, and stay at par with developed North in DT & automation
[China, Japan, Korea with strategy for Industry 4.0, AI, etc.]
SEA have holistic development plans with features of export promotion, GVCs
integration (along with focus on human resources, strengthening innovation & ICT)
Plan to reach certain income level viz. middle income country by 2030 (Myanmar), upper
middle country by 2022 (Philippines)
Exclusive focus of DE & Industry 4.0 by Singapore, Thailand, Cambodia
SA bringing more dedicated trade & industrial policies with focus on promoting
country’s brand, GVCs integration, etc. mainly in India, Pakistan, Afghanistan &
Bhutan [readiness for DT adoption in Pakistan, Afghanistan, & Industry 4.0 in India]
Anticipated flatter smiley curve due to DT for South may not come fully true; Rather
Asia may lead certain industry value chains and gain value added
14
15
FVA share of gross exports in the world (%)
Region 2005 2008 2009 2011 2012 2014 2015 2016
South Asia (SA) 18.8 24.5 21.8 25.1 25.1 23.0 19.1 16.1
ASEAN/SEA 31.4 30.5 28.1 28.9 29.1 29.2 28.9 28.2
East Asia (EA) 14.5 17.8 14.7 18.1 17.6 16.5 13.5 12.7
North America
(NA)8.1 9.9 7.6 9.7 9.7 8.7 7.7 7.4
EU 28 10.4 12.7 10.8 14.0 14.3 12.9 12.2 11.6
South and
Central
America (SCA)
10.2 10.5 8.2 8.8 9.4 10.1 10.3 8.7
16
Region wise FVA share of gross exports (2011) (%)
17
Region wise FVA share of gross exports (2016) (%)
18
Differences in FVA share of gross exports (2016-2011)
Regi
on
Agric
ultur
e,
fores
try &
fishi
ng
Manufa
cturing
Food
prod
ucts,
beve
rage
s &
toba
cco
Text
iles,
app
arel
&
leat
her
pro
duct
s
Woo
d &
its
pro
duct
s
Pap
er &
its
pro
duct
s
Coke
&
refin
ed
petr
oleu
m
prod
ucts
Chemic
als &
pharma
ceutical
product
s
Rub
ber
&
plas
tic
pro
duct
s
Othe
r
non-
meta
llic
mine
ral
prod
ucts
Basic
meta
ls &
fabri
cate
d
meta
l
prod
ucts
Com
pute
rs,
elect
ronic
&
elect
rical
equi
pme
nt
Mach
inery
&
equi
pme
nt
Moto
r
vehicl
es
Othe
r
trans
port
equi
pme
nt
Other
manu
factur
ing;
repair
etc.
Tot
al
busi
nes
s
serv
ices
SA (1.8) (12.2) (1.5) (3.9) (3.3) (7.5) (23.3) (7.5) (2.8) (10.1) (8.0) (9.6) (8.6) (10.4) (13.5) (9.9) (2.6)
SEA 3.5 (2.8) (1.1) 1.9 2.0 (2.4) (8.8) (3.6) (4.0) (2.8) (0.4) (3.4) (1.9) (2.4) (3.7) (2.7) 0.0
EA (1.4) (6.1) (3.2) (2.9) (3.0) (6.3) (20.5) (8.5) (6.3) (4.9) (10.2) (4.6) (4.8) (4.1) (4.4) (3.4) (2.4)
NA (1.6) (3.4) (1.7) (0.6) (0.2) (1.0) (15.7) (3.5) (2.1) (1.6) (1.7) (1.1) (1.1) (1.9) (0.3) (1.1) (1.0)
EU28 (1.4) (3.4) (1.3) (1.7) (1.6) (1.8) (11.2) (3.0) (2.3) (2.5) (5.5) (1.9) (1.6) (1.6) 0.8 (1.2) (0.1)
SCA (0.1) (1.0) (0.1) (1.3) (3.1) (1.5) (4.8) (1.4) (0.5) (0.5) (2.0) (0.9) (0.4) 0.3 4.2 1.3 (0.9)
Asia’s Backward Linkages – Trend Analysis Traced in ICT/electricals, machinery and transport equipment, coke/petroleum
oil, metals, even chemicals, rubber,/plastics and textiles/leather.
During 2011-16, significant fall in FVA content in gross exports, mainly for EA
(mainly China) and SA (India), i.e., rise in DVA content
Post-crisis, rearrangement of Asian GVCs linkages in manufacturing – focus on
domestic industries in the wake of rising protectionism
ASEAN countries still better linked to GVCs for machinery, metals, ICT
Integration of US & SCA declined over the years (presence in few industry
value chains of coke oil and automotive)
In food value chains, ASEAN dominated even with few EU and EA countries
In textiles, leather, paper, machinery, chemicals, rubber, plastic and minerals
value chains, ASEAN, Mexico, Hong Kong and Chinese Taipei continued to
have significant backward integration
Singapore, Vietnam, Hong Kong, Chinese Taipei are important links in wood
value chains
19
20
Country wise FVA share of gross exports (2011) – Only manufacturing (%)
Country
Food
produ
cts,
bevera
ges &
tobacc
o
Textil
es,
appar
el &
leathe
r
produ
cts
Wood
& its
produ
cts
Paper
& its
produ
cts
Coke
&
refine
d
petrol
eum
produ
cts
Chemical
s &
pharmace
utical
products
Rubb
er &
plasti
c
produ
cts
Other
non-
metal
lic
miner
al
produ
cts
Basic
metals
&
fabric
ated
metal
produ
cts
Compu
ters,
electro
nic &
electric
al
equipm
ent
Machi
nery &
equipm
ent,
nec
Motor
vehicl
es&
trailer
s
Other
transp
ort
equip
ment
Other
manufact
uring;
repair
etc.
South Asia
India 7.7 17.2 11.5 25.7 64.5 29.4 23.9 32.4 37.6 40.7 34.4 33.9 33.3 34.0
ASEAN
Brunei
Darussalam 41.3 18.4 33.8 29.6 8.2 15.2 31.0 9.0 12.6 37.1 32.8 36.8 31.9 21.5
Cambodia 23.6 41.7 13.7 46.4 41.8 38.7 45.8 35.4 46.0 41.6 40.9 40.2 37.0 33.1
Indonesia 9.2 22.1 7.1 16.8 21.8 18.8 29.0 8.5 16.9 35.5 35.8 20.2 40.3 18.8
Malaysia 33.0 35.1 22.1 30.1 29.9 40.4 48.7 33.3 53.0 60.4 46.9 60.3 55.2 42.4
Philippines 11.5 17.8 23.0 32.7 58.9 35.8 36.0 28.2 27.6 35.9 31.4 34.9 34.5 25.5
Singapore 40.9 37.9 37.9 35.3 84.3 45.8 40.2 46.8 45.8 45.9 46.4 40.2 44.0 41.1
Thailand 19.6 25.9 31.3 35.8 58.4 42.4 49.2 35.5 56.7 57.6 58.9 51.9 52.4 47.2
Viet Nam 37.9 45.5 49.7 45.8 43.8 50.9 54.2 34.7 53.0 54.7 61.2 51.8 56.4 49.6
East Asia
Japan 11.5 18.5 12.6 10.5 57.4 18.1 15.9 13.3 26.6 16.0 13.4 12.4 14.6 15.1
Korea 30.7 34.4 33.3 33.5 80.9 46.1 38.9 37.8 50.3 41.5 38.6 37.8 42.3 37.2
China 10.3 13.1 16.5 16.8 42.4 21.4 22.3 16.0 25.2 31.4 21.2 20.7 20.2 16.0
Hong Kong 32.3 41.0 40.4 33.9 53.1 39.9 35.3 39.0 60.0 48.6 64.6 43.4 39.4 39.2
Chinese
Taipei 36.8 44.5 45.3 43.2 83.2 63.6 50.4 45.0 56.7 37.4 49.1 45.9 43.3 39.6
21
Country wise FVA share of gross exports (2016) – only manufacturing (bold figures indicate decline in shares from 2011 to 2016) (%)
Country
Food
produc
ts,
bevera
ges &
tobacc
o
Textile
s,
appar
el &
leathe
r
produ
cts
Wood
& its
produ
cts
Paper
& its
produ
cts
Coke &
refined
petrole
um
produc
ts
Chemicals
&
pharmace
utical
products
Rubbe
r &
plastic
produ
cts
Other
non-
metalli
c
miner
al
produ
cts
Basic
metals
&
fabrica
ted
metal
produc
ts
Comput
ers,
electroni
c &
electrica
l
equipme
nt
Machin
ery &
equipm
ent, nec
Motor
vehicle
s&
trailers
Other
transpo
rt
equipm
ent
Other
manufactu
ring;
repair etc.
South Asia
India 6.2 13.4 8.2 18.1 41.2 21.9 21.2 22.3 29.6 31.1 25.8 23.5 19.8 24.1
ASEAN
Brunei
Darussalam 44.8 21.5 31.6 30.9 5.3 12.5 30.4 10.1 13.2 40.4 35.5 39.7 33.5 23.1
Cambodia 20.7 37.0 12.6 42.4 49.8 39.5 44.4 36.3 44.3 38.5 36.3 34.9 38.9 27.9
Indonesia 7.3 20.0 6.4 15.1 14.5 13.7 25.6 7.0 14.9 26.4 27.8 16.2 33.3 16.2
Malaysia 26.7 35.3 18.5 26.6 19.2 35.2 43.8 29.8 46.4 54.6 43.6 55.6 49.7 34.0
Philippines 10.5 16.2 21.8 28.4 37.9 28.5 31.9 24.0 23.1 38.9 31.7 40.9 35.8 24.8
Singapore 39.0 34.7 37.5 31.4 73.6 43.0 34.4 46.4 49.3 43.6 44.3 39.7 39.2 42.5
Thailand 15.9 20.8 26.4 27.2 43.6 32.2 41.4 28.4 48.0 47.9 52.2 45.8 47.6 39.2
Viet Nam 36.8 44.8 49.4 43.8 31.1 46.4 51.8 32.5 50.5 61.4 62.3 51.5 54.3 48.2
East Asia
Japan 10.1 17.6 13.3 9.7 42.1 14.1 12.6 10.9 18.5 13.6 10.5 10.4 15.2 12.9
Korea 24.5 28.9 25.4 23.5 64.8 31.6 27.8 26.0 34.4 34.0 28.5 27.8 33.4 28.5
China 7.8 9.4 13.4 11.7 29.7 14.4 15.1 10.9 15.9 25.1 15.2 15.8 15.3 12.3
Hong Kong 25.5 34.0 33.8 29.1 43.1 31.0 28.3 31.0 59.1 47.5 66.5 39.7 34.0 38.9
Chinese
Taipei 27.2 32.6 32.7 33.0 57.1 45.9 35.7 32.8 46.2 27.7 43.0 40.1 38.6 32.7
22
DVA in exports of intermediate products as a share of total gross exports (%)
Region 2005 2008 2009 2011 2012 2014 2015
India (South Asia)42.9 41.6 39.5 38.1 37.9 38.8 40.0
ASEAN41.4 42.9 43.3 44.4 43.8 43.1 42.8
East Asia44.3 42.2 42.9 40.6 40.8 42.8 46.3
NA50.8 50.6 51.1 52.0 51.2 51.0 51.1
EU 2848.1 46.4 46.4 44.6 44.6 45.2 45.8
SCA59.4 61.5 62.4 65.9 64.7 62.9 60.5
23
Region-wise DVA in exports of intermediates as a share of total exports (2011) (%)
24
Region-wise DVA in exports of intermediates as a share of total exports (2015) (%)
25
Differences in DVA in exports of intermediates as a share of total exports (2015-2011)
Region
Agric
ultur
e,
fores
try &
fishi
ng
Man
ufact
urin
g
Food
prod
ucts,
beve
rages
&
toba
cco
Textil
es,
appar
el &
leathe
r
produ
cts
Woo
d &
its
prod
ucts
Pape
r &
its
prod
ucts
Coke
&
refine
d
petro
leum
prod
ucts
Chemi
cals &
pharm
aceuti
cal
produ
cts
Rub
ber
&
plast
ic
prod
ucts
Othe
r
non-
meta
llic
mine
ral
prod
ucts
Basi
c
met
als
&
fabr
icat
ed
met
al
pro
duc
ts
Co
mp
uter
s,
elec
tro
nic
&
elec
tric
al
equ
ipm
ent
Mac
hin
ery
&
equi
pme
nt
Mot
or
vehi
cles
Oth
er
tran
spo
rt
equi
pme
nt
Othe
r
man
ufact
urin
g;
repa
ir
etc.
Tota
l
busi
ness
servi
ces
SA 2.3 4.9 (4.6) 2.8 18.2 12.2 9.9 4.0 2.5 15.7 6.7 6.5 2.9 2.2 2.0 4.6 (2.6)
SEA (1.6) 2.0 (1.9) 3.5 (1.0) (1.2) 0.8 2.0 3.0 3.2 (1.2) 6.9 1.4 (0.3) 1.1 3.5 (1.4)
EA 2.9 6.3 1.3 4.1 3.3 2.2 4.9 4.4 5.8 6.3 8.3 10.2 5.3 (3.2) 1.7 1.2 2.7
NA 3.1 0.6 (0.3) (1.2) 1.6 (1.6) 9.9 (0.6) (0.3) (1.2) (2.8) 5.1 1.9 7.2 2.7 9.5 (1.7)
EU28 1.5 3.8 (1.8) 4.0 7.5 0.8 24.3 (3.3) 6.0 5.4 7.2 9.7 6.3 0.6 3.8 (0.2) 1.0
SCA 2.1 (1.6) (1.9) 3.1 2.6 (1.2) (1.8) (4.4) (1.4) 1.1 (0.5) 1.6 (0.3) 0.7 (4.3) (2.1) (4.2)
26
Country-wise DVA in exports of intermediates as a share of total exports (2011) – only manufacturing (%)
Food
produ
cts,
bevera
ges &
tobacc
o
Textil
es,
appar
el &
leathe
r
produ
cts
Wood
& its
produ
cts
Paper
& its
produ
cts
Coke
&
refined
petrole
um
produc
ts
Chemicals
&
pharmace
utical
products
Rubb
er &
plasti
c
produ
cts
Other
non-
metall
ic
miner
al
produ
cts
Basic
metals
&
fabrica
ted
metal
produc
ts
Comput
ers,
electron
ic &
electric
al
equipm
ent
Machin
ery &
equipm
ent, nec
Motor
vehicle
s&
trailer
s
Other
transp
ort
equipm
ent
Other
manufact
uring;
repair etc.
India (SA) 40.3 34.3 19.8 39.1 26.3 43.5 55.4 41.4 44.2 27.5 26.2 20.1 16.1 14.6
ASEAN
Brunei
Darussalam 11.9 11.8 46.4 24.0 4.7 76.2 55.3 82.4 86.5 17.6 38.4 1.1 32.1 5.2
Cambodia 31.5 16.7 75.8 46.5 6.9 27.3 40.4 44.5 42.1 25.3 14.2 15.4 19.0 13.4
Indonesia 34.8 27.1 84.7 70.1 59.6 67.8 59.0 82.4 79.6 33.8 24.0 29.8 13.3 17.4
Malaysia 25.9 22.2 68.0 49.7 57.5 50.3 43.7 60.0 43.4 22.1 19.5 13.5 11.8 16.9
Philippines 35.9 12.7 72.1 55.4 32.9 53.9 56.0 66.4 70.0 38.9 29.3 28.9 23.1 40.4
Singapore 22.3 12.9 40.5 53.6 12.6 40.0 47.1 49.7 45.9 33.2 23.6 19.8 13.6 15.6
Thailand 34.2 34.1 64.4 50.3 33.1 50.3 42.3 57.1 39.3 23.7 14.7 15.8 12.7 8.8
Viet Nam 26.1 20.1 47.2 42.6 42.7 40.4 38.0 59.0 44.0 22.1 13.8 25.9 14.4 9.6
East Asia
Japan 39.0 61.6 37.8 76.8 34.8 68.8 71.3 79.7 70.0 49.9 32.8 26.9 22.0 19.5
Korea 29.1 44.5 50.5 54.2 15.8 46.4 50.9 54.2 45.4 33.7 20.9 18.7 18.6 14.8
China 39.7 33.3 68.5 66.4 46.2 59.3 62.1 72.2 65.7 32.2 32.8 25.6 21.5 17.0
Hong Kong 18.6 28.0 5.7 51.2 38.5 41.8 55.7 55.5 35.3 29.9 11.6 3.0 18.8 16.3
Chinese
Taipei 24.2 38.5 45.9 47.7 13.9 32.5 42.8 50.6 39.9 38.1 18.3 16.6 14.9 12.2
27
Country-wise DVA in exports of intermediates as a share of total exports (2015) – only manufacturing (bold ones indicate decline from 2015 to 2011) (%)
Food
produc
ts,
bevera
ges &
tobacc
o
Textil
es,
appar
el &
leathe
r
produ
cts
Wood
& its
produ
cts
Paper
& its
produ
cts
Coke
&
refined
petrole
um
produc
ts
Chemicals
&
pharmace
utical
products
Rubb
er &
plastic
produ
cts
Other
non-
metall
ic
miner
al
produ
cts
Basic
metals
&
fabrica
ted
metal
produc
ts
Comput
ers,
electron
ic &
electric
al
equipm
ent
Machin
ery &
equipm
ent, nec
Motor
vehicle
s&
trailer
s
Other
transpo
rt
equipm
ent
Other
manufactu
ring;
repair etc.
India (SA) 35.7 37.2 38.1 51.4 36.2 47.5 58.0 57.1 50.9 33.9 29.1 22.4 18.2 19.1
ASEAN
Brunei
Darussalam 15.3 7.9 34.2 5.4 3.3 37.4 49.8 81.2 85.6 15.1 25.9 0.6 23.8 3.5
Cambodia 33.0 26.2 83.2 50.1 0.6 47.4 48.5 58.7 50.4 41.9 23.6 29.9 23.1 17.1
Indonesia 31.3 33.1 86.4 68.1 59.6 68.3 60.9 87.9 77.9 41.8 28.1 27.3 14.4 21.0
Malaysia 25.0 24.2 70.1 52.1 61.9 53.9 46.7 66.0 47.0 29.1 25.0 16.0 15.5 22.1
Philippines 33.8 22.5 76.6 53.5 36.8 62.1 61.0 75.0 74.3 43.4 33.7 26.5 24.3 42.0
Singapore 22.9 17.8 35.9 54.9 16.6 40.7 50.6 46.3 45.3 37.9 24.1 18.8 17.4 22.1
Thailand 33.9 33.6 69.0 48.9 37.7 56.5 48.1 61.0 44.7 32.5 17.9 17.5 15.3 14.5
Viet Nam 25.4 24.5 47.9 42.4 47.5 44.1 40.8 59.2 44.9 22.4 14.9 23.0 12.9 9.4
East Asia
Japan 33.9 53.8 36.2 73.0 34.9 67.3 72.2 77.8 73.7 54.8 40.6 23.7 22.5 27.3
Korea 29.9 47.8 56.3 60.5 21.0 55.3 60.4 65.1 57.6 44.7 28.6 19.5 23.3 22.3
China 40.4 36.9 71.2 68.1 48.5 62.8 68.1 77.3 73.1 40.2 38.1 25.8 21.0 18.2
Hong Kong 30.8 28.7 0.3 39.6 36.0 45.1 61.1 61.8 34.9 27.0 10.4 4.9 19.7 19.1
Chinese
Taipei 26.3 46.7 51.8 53.2 18.1 43.0 52.8 61.7 49.7 50.4 25.9 15.4 18.6 18.6
Asia’s Forward linkages: Trend Analysis Significant in selected value chains only - wood, paper, rubber & plastic,
mineral products, metals and even chemicals
Rise in FL in GVCs in manufacturing for all regions except SCA
Highest by EA and SA
EU has highest forward participation, while NA has lowest
ASEAN’s FL increased only by 2 percentage points during 2011-15
But ASEAN & Japan, China, Korea and US have significant role in
chemicals/pharma value chains
Japan has higher FL in textiles value chains in 2011 & 2015, and improved
shares in ICT value chains in 2015
India as key player in value chains of wood, paper, metals, rubber/plastic,
chemicals, metals, minerals with rising shares during 2011-15
FL by regions lower in automotive, machinery and transport equipment, but
shares did not decline much – potential area for Asian growth28
Policies to Reshape Asia in GVCs Improve policy synchronization of FDI, foreign trade and industrial policies with eye
on development of Industry 4.0 and digital technologies [viz. bringing Digitally
Informed FTP for India as suggested by Banga (2019b)]
Rise in 4th Industrial Revolution but with a view to support export-oriented
domestic industries
As challenges more for Developing Asia in terms of jobs restructuring , applying
smart production in traditional industries, adopting to AI, etc., better preparedness
is required from both government and private agencies
Unless different Asian economies’ cooperate, they will even fail to compete
Reforms at country level, then at regional level in varied industry VCs
Create dynamic cross-region linkages in machinery, automotive, textiles
29
Policies to Reshape Asia in GVCs India can strengthen growing forward linkages in metals, minerals, paper, rubber,
plastics; as well as better link its services sector to GVCs of EA and SEA
ASEAN, SA can increase capacities for linkages in ICT, electrical machinery and
transport equipment
Scope lies in improving role of Asia as the key supplier in food, textile/leather
value chains
Asia can lead differently by adopting new models of globalization, trade,
automation and digitization but with consideration of social and environmental
aspects (viz. bringing more green products, keeping human resources at par with
robots in production)
Learn lessons from success stories but with caution to fulfil country’s own
domestic requirements
30
Conclusion Changes in theories moved from flying geese to fragmentation to upgrading in
GVCs to snakes and spiders pattern, & now to DT driven upgrading in GVCs
Smiley curve of GVCs may change due to DT thereby widening gap between
North and South; but recent policy announcement in EA, SEA and also SA may
help capturing higher value added gains
Initiatives are rising to boost domestic manufacturing to move up GVCs, such as
Made in China 2025, Make in India, etc. (even Made in Afghanistan for IT
products, Make in Pakistan, etc.)
Conversely, significant fall in FVA content of gross exports for EA and SA
(India), who are witnessing rise in forward linkages
ASEAN continues to have strong GVC integration in manufacturing
Although China entered GVCs are slowing down, but with DT and smart
manufacturing & associated changes in FTP, along with maturing of EU and US
value chains, Asia can easily capture vacant and new spaces by incorporating
fresh innovative thinking and well-thought policy changes
Trends show that Asia has potentials and all set to emerge as big manufacturing
player with different look in GVCs (holistic-development based GVCs)
31
Thank You
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