The Impact of the COVID-19 Pandemic on the Global Value Chain of the Manufacturing Industry

Jiaze Sun, Huijuan Lee and Jun Yang
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Jiaze Sun: School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China
Huijuan Lee: School of Economics and Management, Beijing Forestry University, Beijing 100083, China
Jun Yang: School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China

Sustainability, 2021, vol. 13, issue 22, 1-20

Abstract: This paper adopts the GDYN model to estimate the dynamic impact of the COVID-19 pandemic on global manufacturing industry and the value chain. Our simulation finds that (1) In the short run, the low-tech manufacturing industries will suffer greater shocks, with a decline of output growth in 2021 by 6.0%. The growth rate of the high-tech manufacturing industry showed an increasing trend of 3.7% in 2021. (2) In the post-epidemic period, the total manufacturing output will return to the baseline level, from which the growth rate of low-tech manufacturing will rebound, demonstrating a V-shaped development trajectory. (3) From the perspective of Global Value Chain (GVC), the participation in GVCs of manufacturers in countries along the Belt and Road, the European Union and the United States will weaken, while China’s manufacturing industry has witnessed an obvious improvement in export competitiveness. The import added value of China has decreased, which shows that its ability to meet domestic demand has been improving. This indicates that the COVID-19 pandemic is providing a crucial opportunity for China to upgrade its manufacturing value chain, which contributes to the accelerated construction of a new dual-cycle development pattern.

Keywords: global value chain; manufacturing; COVID-19; global trade analysis project (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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