Estimates of the trade and global value chain (GVC) effects of China’s Pilot Free Trade Zones: a research based on the quantitative trade model

Zhuangxiong Yu, Jiarong Han, Xunpeng (Roc) Shi and Yang Yang

Journal of the Asia Pacific Economy, 2025, vol. 30, issue 4, 1255-1302

Abstract: While Pilot Free Trade Zones (PFTZs) have been promoted in China as a unilateral opening measure to boost economic growth amid deglobalization, their benefits in driving cities’ openness remain an underexplored research topic. This study aims to investigate the impact of PFTZs on cities’ trade performance. By employing a multi-region and multi-sector general equilibrium analytical model, the study reveals that the PFTZs enhance the overall level of openness across all cities in the country. Regarding the value-added sources, the PFTZs reduce the proportion of value-added originating from domestic regions and increase the proportion derived from international markets. Moreover, the PFTZs play a pivotal role in stimulating exports and strengthening the Chinese cities’ participation in the Global Value Chain (GVC). Meanwhile, the PFTZs enhance cities’ upstreamness in GVC while exerting an inhibitory effect on the downstreamness in GVC for most cities.

Date: 2025
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DOI: 10.1080/13547860.2024.2403174

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