Whither Global Value Chains: The Shifting Role of Taiwanese FDI in Mainland China

Michael Murphree ()
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Michael Murphree: University of South Carolina

A chapter in China’s New Development Strategies, 2022, pp 141-166 from Springer

Abstract: Abstract China’s entry into and industrial upgrading within global value chains (GVC) was facilitated by foreign direct investment (FDI) in subsidiaries of foreign, especially Taiwanese, enterprises. These investments brought specific capabilities, as well as development challenges, which have continued to shape the performance of domestic Chinese enterprises. In the aftermath of the Global Financial Crisis of 2007–2008, China’s role in GVCs has evolved with an increasingly important role for domestic firms and declining competitiveness in labor-intensive buyer-driven value chains. Most importantly, a new generation of China-oriented FDI in digital and value-added services is adding new life to the manufacturing economy and concentrating investment again in China’s coastal urban areas. While the rise of domestic firms has shifted the ownership of production assets across existing electronics GVCs, rather than whithering, Taiwanese investment has moved to new industrial niches in Mainland China. This sets the stage for several potential avenues for development in an era of trade protectionism and technology nationalism.

Keywords: Global value chains; Manufacturing investment; Service investment; Upgrading; Regional economic transition (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-19-3008-9_6

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DOI: 10.1007/978-981-19-3008-9_6

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