Research on China’s Manufacturing Industry Moving towards the Middle and High-End of the GVC Driven by Digital Economy

Rongrong Zhou, Decai Tang, Dan Da, Wenya Chen, Lin Kong and Valentina Boamah
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Rongrong Zhou: School of Law and Business, Sanjiang University, Nanjing 210012, China
Decai Tang: School of Law and Business, Sanjiang University, Nanjing 210012, China
Dan Da: School of Business, Jiangsu Open University, Nanjing 210000, China
Wenya Chen: School of Management Science and Engineering, Nanjing University of Information Science & Technology, Nanjing 210044, China
Lin Kong: School of Law and Business, Sanjiang University, Nanjing 210012, China
Valentina Boamah: School of Management Science and Engineering, Nanjing University of Information Science & Technology, Nanjing 210044, China

Sustainability, 2022, vol. 14, issue 13, 1-30

Abstract: A country’s manufacturing industry is often an important route for national prosperity, but it is also a conduit by which a digital economy may become truly useful. This is so the deep integration of the digital economy and manufacturing industry can enhance independent innovation efficiencies, promote the development of advanced manufacturing clusters, and constantly spawn new models, forms of business, and industries. Consequently, it is crucial to improve China’s global manufacturing value chain. This article starts with an analysis of the development status and competitiveness of the digital economy in China and abroad. It establishes a structural equation and uses the latest data from the World Input-Output and Asian Development Bank databases. It introduces new variables, such as digitization, research and development (R&D) investment, and industrial scale to empirically analyze China’s manufacturing industry’s global value chain (GVC). The results show that the digitization of China’s manufacturing industry can increase the forward participation of GVC in the manufacturing industry to improve the division status of GVCs. Analyses suggest that due to insufficient R&D investment in the division of labor in the GVCs, China’s manufacturing industry is prone to low-end lock-in, inefficient industrial structures, and weak innovation ability. Consequently, the following suggestions are proposed: China’s manufacturing industry needs to accelerate digital transformation, increase R&D investment, actively participate in the division of labor in the GVCs, and enhance core competitiveness.

Keywords: digitization; manufacturing value chain in China; promotion countermeasure (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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