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1、GLOBAL VALUE CHAIN DEVELOPMENT REPORT 2023RESILIENT AND SUSTAINABLE GVCS IN TURBULENT TIMESGLOBAL VALUE CHAIN DEVELOPMENT REPORT 2023RESILIENT AND SUSTAINABLE GVCS IN TURBULENT TIMESThe Global Value Chain Development Report 2023,the fourth in this biennial series,is released at a critical juncture i
2、n the evolution of Global Value Chains(GVCs).In response to the diverse shocks of recent years,this report explores approaches to build resilient and sustainable GVCs.It provides an overview of the most recent trends in GVCs,assesses the effects of the trade tensions and the COVID-19 pandemic on GVC
3、s,and illustrates particular changes of energy and semiconductor supply chains.It also analzyes the challenges of climate change to GVCs and proposes a framework of greening value chains and policy options for enhancing inclusive development through GVC participation.GLOBAL VALUE CHAIN DEVELOPMENT R
4、EPORT 2023RESILIENT AND SUSTAINABLE GVCS IN TURBULENT TIMESGLOBAL VALUE CHAIN DEVELOPMENT REPORT 2023RESILIENT AND SUSTAINABLE GVCS IN TURBULENT TIMESCreative Commons Attribution-NonCommercial 3.0 IGO license(CC BY-NC 3.0 IGO)2023 Research Institute for Global Value Chains at the University of Inter
5、national Business and Economics,Asian Development Bank,the Institute of Developing EconomiesJapan External Trade Organization and the World Trade Organization.This work is a product of the Research Institute for Global Value Chains at the University of International Business and Economics,Asian Deve
6、lopment Bank,the Institute of Developing EconomiesJapan External Trade Organization and the World Trade Organization.It is based on joint research efforts to better understand the ongoing development and evolution of global value chains and their implications for economic development.The views expre
7、ssed in this work are those of the individual chapter authors and do not necessarily reflect the views and policies of the copublishing partners,their boards of executive directors or governors,or the governments they represent,nor that of the institutions with which the individual authors may be af
8、filiated.The opinions expressed and arguments employed herein are not intended to provide any authoritative or legal interpretation of the provisions of the WTO agreements and shall in no way be read or understood to have any legal implications whatsoever.The copublishing partners do not guarantee t
9、he accuracy of the data included in this work and accept no responsibility for any consequence of their use.The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by the copublishing partners in preference to others of a similar nature tha
10、t are not mentioned.By making any designation of or reference to a particular territory or geographic area,or by using the term“country”in this work,or the boundaries,colors,denominations,and other information shown on any map in this work,the copublishing partners do not intend to make any judgment
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12、license.Please contact the Research Institute for Global Value Chains at the University of International Business and Economics(email:)if you have questions or comments with respect to content,or if you wish to obtain copyright permission for your intended use that does not fall within these terms.F
13、or any copyright materials in this publication that are attributed to a source other than any of the copublishing partners,please contact the copyright owner or publisher of that source for permission to reproduce it.The copublishing partners cannot be held liable for any claims that arise as a resu
14、lt of your use of those materials.Note:ADB recognizes“China”as the Peoples Republic of China;“South Korea”as the Republic of Korea;“Laos”as the Lao Peoples Democratic Republic;“Russia”as the Russian Federation;and“Vietnam”as Viet Nam.“Taipei,China”is a member of ADB;“Chinese Taipei”is a member of WT
15、O.Chapters of the report contributed by ADB use ADBs member designation.Cover design by Mike Cortes.Printed on recycled paperGlobal Value ChainsiiiContentsTables,Figures,and Boxes viForeword xiiiPublishing Partners xvContributors xviAcknowledgments xviiiAbbreviations xixEditorial and Advisory Commit
16、tee xxvKey Messages and Findings xxviExecutive Summary xxviiiChapter 1:Examining Global Value Chains in Times of International Shocks 1 1.1Introduction 1 1.2Global Value Chains During Periods of Shocks 3 1.3Dollar Prices and Global Value Chains 12 1.4Potential Bottleneck Products in International Tr
17、ade 17 1.5 Geographic Concentration in Value and Frequency of Trade 21 Concentration in Foreign Value-Added Sources 21 Concentration in Frequency of Engagement 24 1.6Adjusting to Shocks 28 Prospects for Global Value Chain Reconfiguration 30 Localization Policies in the Peoples Republic of China 39 C
18、onclusion 43 References 45Chapter 2:Impacts of Trade Tensions and COVID-19 on Global Value Chains 49 2.1Introduction 49 2.2 Sources of shocks and their propagation in Global Value Chains 50 Sources of Shocks and Mechanisms of Propagation 51 Propagation of Shocks through Tariff Measures in GVCs 52 Pr
19、opagation of Shocks through Non-Tariff Measures in GVCs 54 2.3 Patterns of Restructuring and Regionalization of Global Trade 56 Global Trade Picture 56 Trade Diversion 57 Reshoring and Regionalization 59 2.4Trade Tensions and Global Value Chains 62 Trade Among the Major Economies 62ivContents Triang
20、ular Trade between the PRC,the US and Third Countries 64 2.5.COVID-19,GVCs and Digitalization 67 The Impact of COVID-19 on Reshaping Global Value Chains 67 Counterfactual Analysis of the Impact of the COVID-19 Pandemic on GVCs 67 Digitalization,Resilience and Recovery 72 Conclusion 76 Appendix 78 1:
21、Changes in the Average Global Value Chain Production Length as a Result of the USPRC Trade Tension 78 2:Top Five Trading Partners of the Worlds Main Economies 79 3:Gross Trade between the US and ASEAN Countries 80 4:CGE Model Construction and Scenario Setting 81 5:The Impact of Digital Policy on Glo
22、bal Value Chains 84 References 85Chapter 3:Toward a Secure and Resilient Energy Supply Chain 90 3.1 The Impact of Rising Geopolitical Tensions on the Rules Underpinning the Multilateral Trading System 91 Why are GVCs,Including Energy Value Chains,Vulnerable to an Erosion of WTO Norms through Geoecon
23、omics?91 How Geopolitical Crises are Eroding the Legal Fabric of the MTS and of Global Value Chains:The Effects of the Russian War in Ukraine on Energy Supply Chains 93 “Trade Weaponization”and Trade Sanctions are Escalating 94 Possible Legal Responses to Protect the MTS and Global Value Chains Agai
24、nst Geoeconomics 95 3.2New Dynamics of Global Energy Supply Chains 99 The COVID-19 Shock to Energy Supply Chains 99 The US-PRC Trade Tensions and Its Impact on Energy Supply Chains 100 Geopolitical Tensions and Their Impact on Energy Supply Chains:Energy Geopolitics 101 The Energy Crisis and Energy
25、Security 102 3.3 Geopolitical Changes and New Evolution of Energy Supply Chains 104 Historical Evolution of Energy Domination and Energy Geopolitics 104 The Dynamic Evolution Global Energy Supply Chains 106Global Value ChainsvContents CGE Simulation Analysis for the Impact of the Energy Supply Chain
26、s Re-Shaping 113 3.4 Renewable Energy and the Future Directions of Energy Supply Chains and Energy Trade 118 Carbon Neutrality,Energy Transition,and Renewable Energy Development 118 Renewable energy supply chains and the new world energy market and trade 119 Challenges facing to renewable energy sup
27、ply chains 120 3.5 Potential Impact of the Energy Dynamics on the Emission Goals 122 Conclusions 125 References 127Chapter 4:From Fabless to Fabs Everywhere?Semiconductor Global Value Chains in Transition132 4.1Introduction 132 4.2 Semiconductor Global Value Chains:Segments and Value Added Structure
28、 136 4.3 Semiconductor Global Value Chains:Major Economy Participants 141 4.4 Changing Fortunes in the Global Semiconductor Industry:From Integrated Fabs to the“Fabless Revolution”145 The Rise of the Fabless Firms 148 The Rise of the Dedicated Foundry 151 Overall Specialization in the Semiconductor
29、Market 153 4.5 The Role of the Government in the Development of the Semiconductor Industry 155 Support in Advanced Economies for Semiconductor Production 155 Rise of the East Asian Tigers 156 4.6 The Rise of East Asia in Semiconductor Global Value Chains 164 4.7Techno-Nationalism:Must Real States Ha
30、ve Fabs?170 Conclusions 178 References 183Chapter 5:Tracing Carbon Dioxide Emissions along Global Value Chains 188 5.1Historical CO2 Emissions and Climate Change Challenges 189 5.2Visible Impacts of Climate Change 190 5.3 Historical CO2 Emissions and Challenges Towards the Achievement of Carbon Neut
31、rality 190vi 5.4 CO2 Emissions and Their Responsibilities along Global Value Chains 194 5.5Tracing CO2 Emissions in Global Value Chains 194 5.6 Production-vs Consumption-Based Emissions and Emissions Transfers along GVCs 196 5.7 Sharing CO2 Emissions Responsibilities Across Economies along Global Va
32、lue Chains 198 5.8 Tracing CO2 Emissions of Multinational Enterprises in Global Value Chains 201 5.9Measuring the CO2 Emissions of MNEs in GVCs 201 5.10Changing Trends in MNEs CO2 Emissions 203 5.11Decomposing MNEs CO2 Emissions by Trade Patterns 205 5.12Measuring the Carbon Footprints of MNEs in GV
33、Cs 208 5.13 Component Structure of MNEs Carbon Footprints,A Producer Perspective 210 5.14 Component Structure of MNEs Carbon Footprints,A Consumer Perspective 210 5.15 Re-evaluating the Carbon Mitigation Responsibilities of MNEs in Global Value Chains:From a Factor Income Perspective 212 5.16Environ
34、mental Costs and Economic Benefits of MNEs 213 5.17Possible Incentive Fund Led by MNEs 219 Conclusion and discussion 220 References 224Chapter 6:Greening Global Value Chains:A Conceptual Framework for Policy Action 228 6.1Introduction 228 6.2The Driving Factors of Global Value Chain Greening 231 6.3
35、Types of Environmental Innovation 240 6.4Actors Involved in Environmental Innovation 243 6.5The Enabling Mechanisms of Environmental Innovation 245 6.6The Outcomes of Global Value Chain Greening 247 6.7A Three-Pronged Strategy for GVC Greening 249 Conclusion 253 References 256Chapter 7:Global Value
36、Chains for Inclusive Development 261 7.1Introduction 261 7.2 GVCs can Improve the Performance of MSMEs in Developing Economies 263 The Context:MSMEs Role in Developing Economies and Trends in their GVC Participation 264ContentsGlobal Value Chains vii GVCs Facilitate Access to International Markets 2
37、66 GVCs Facilitate the Transfer of Good Management Practices 267 GVCs Facilitate Quality Upgrading 269 GVCs Facilitate Technology Transfers and Innovation 272 GVCs Facilitate Access to Trade Finance for MSMEs 273 7.3GVCs Can Help Workers in Developing Economies 275 GVCs Can Support a Shift to Formal
38、 Employment 276 GVCs Can Improve Job Quality 278 GVCs Tend to Widen Wage Inequality 280 GVCs Can Support Gender Equality 283 GVCs Can Reduce the Incidence of Child Labour 288 7.4The Future of Inclusive GVCs 289 Digital Platforms and GVCs 290 Automation and Outsourcing 291 AI and Services GVC 292 7.5
39、Main Messages and Lessons for Policymakers 293 Conclusion 297 References 299 Appendix Background Paper and Chapter Authors Workshop for the Global Value Chain Development Report 2023 313Contents viiiTables,Figures,and BoxesTABLES 1.1 Criteria for Classifying Product Categories as Potential Bottlenec
40、ks 19 1.2 Top Exporters of Potential Bottleneck Products,20002021 21 1.3 Domestic Value-Added in Processing Exports v Normal Exports,Peoples Republic of China;2007,2012,2017(%)42 A1 Scenarios in the CGE Modeling 81 A2 Projected Impacts of Digital Input and Technological Improvements on GVC Activitie
41、s in 2025 84 3.1 Change in Oil Trade Flows Under the Combined Scenario (%Changes Relative to the Baseline)117 4.1 Domestic/Regional Value Added in the Semiconductor Value Chain by Activity,2021(in percent)143 4.2 Changing Fortunes in the Global Semiconductor Industry:Key Trends and Drivers,1959-2022
42、 147 4.3 Worlds Top Semiconductor Lead Firms by Type,Revenue,and Share,2000-2020(in US$billions and Percent of Semiconductor Market)150 4.4 Evolving Domestic and Institutional Contexts of Industry Development in Selected East Asian Economies,1980-2022 159 4.5 Geography of World Semiconductor Manufac
43、turing by Fab Location,Product Applications,and Capacity,2000-2018(foreign owned in parentheses)168 4.6 Worlds Top Semiconductor Manufacturers by Fab Capacity,Main Applications,Fab Locations,and Markets,2010 and 2018 169 5.1 Sharing Emission Responsibilities along GVCs 200 5.2 Net Carbon Transfer an
44、d Incentive Fund of Advanced Economies to Emerging Markets and Developing Economies in Selected Industries through MNEs(2016)220 6.2 Biophysical Outcomes of Global Value Chain greening 248 6.3 A Three-Pronged Strategy for GVC greening 250FIGURES 1.1 Decomposition of World Exports,20072022 4 1.2 Back
45、ward and Forward Global Value Chain Participation Rates,World,19952022 5 1.3 Global Value Chain Participation of Economies,20072010 and 20182022 7 1.4 Global Value Chain Production Lengths by Sector,World,20072010 and 20182022 8 1.5 Global Inflation Rates,20002022(%)12 1.6 Differences in Backward an
46、d Forward Global Value Chain Participation Rates,Nominal vs Real,20072022 14Global Value ChainsixTables,Figures,and Boxes 1.7 Discrepancy,Variability,and Divergence of Real and Nominal Global Value Chain Participation 15 1.8 Export Value and Share of Potential Bottlenecks in the World,20002021 20 1.
47、9 Backward Dependence on Value-Added,Top 20 Economies and Rest of the World($million)23 1.10 Trade in a Directed and Unweighted Network 25 1.11 Pass-Through Indices,Top 20 Economies and Rest of the World 29 1.12 Herfindahl-Hirschman Indexes of Economies,20072010 and 20182022 32 1.13 Agglomeration Cl
48、asses of Economies,20072010 and 20182022 36 1.14 Backward and Forward Agglomeration of Selected Economies,2019,2020,202138 2.1 The Change of the Average Cumulative Input Tariffs 53 2.2 The Trend of Global Tariff and NTMs 55 2.3 Trade Facilitating and Restricting NTMs during COVID-19 55 2.4 Global Ex
49、port of Merchandise and Service 56 2.5 Global Trade of Intermediate and Final Products in 2021 57 2.6 Change in Gross Exports in 20172019 and 2019202258 2.7 The Domestic Value-Added Share in the Total Export 60 2.8 Changes in Developing Asian Economies Value-Added Trade in Intermediate Goods60 2.9 C
50、hanges in Sectoral Production Length of the PRC and the USA 61 2.10 Top Three Trade Partners in Merchandise of the US 62 2.11 PRC-US Trade in High-Tech Products 63 2.12 US Export to PRC Subject to USs Government Export Control 64 2.13 Indirect Import of Intermediate Inputs from the PRC to the US thr
51、ough Third Regions 65 2.14 The Ratio of Indirect Intermediate Import of the US from the PRC through ASEAN and USMCA Countries 66 2.15 The Share of Total,Simple and Complex GVC Activities 68 2.16 Changes in Value-Added Activities in 2020(%)71 2.17 Growth rates of GVC items in the PRC,the US,Mexico,an
52、d India 72 2.18 Counterfactual Outputs of ICT and non-ICT Industries During the COVID-19 74 2.19 Potential GDP Changes(%)and Digital Infrastructure 75 2.20 Changes in the Average Global Value Chain Production Length as a Result of the USPRC Trade Tension(%)78 2.21 ASEAN Exports to the US as a Share
53、of Total Exports(20172021)80 2.22 Intermediate Imports from the PRC as a Proportion of ASEAN Total Intermediate Imports by Country(20172021)80 2.23 The GVCGE Framework 82 2.24 The Effects of Policy Shocks on Economic Variables 83 3.1 Changes of Global CPI Due to Energy Shock 103xTables,Figures,and B
54、oxes 3.2 Historical Evolution of Energy Domination and Energy Geopolitics 105 3.3 The Dynamic Evolution of Energy Supply Chains and Geopolitics 107 3.4 Change in US LNG Exports 108 3.5 Change in US Gas Exports 109 3.6 The Diamond Energy Supply Chain in Asia-Pacific 109 3.7 Change in Russian Oil Expo
55、rts 110 3.8 The West and East Pipeline of Russia to Asia 111 3.9 Real GDP Impact of Energy Supply Chain Restructuring(%Changes Relative to the Baseline)115 3.10 Changes in Gas Trade Flows Under EU-US Energy Supply Chains Scenarios(%Changes Relative to the Baseline)116 3.11 Changes in Gas Trade Flows
56、 Under Eurasian Energy Supply Chains Scenarios(%Changes Relative to the Baseline)116 3.12 Change in Primary Energy in the Future 124 3.13 CO2 Emissions from Combusted Fuels in the Future 125 4.1 The Basic Structure of Semiconductor Value Chains 137 4.2 Semiconductor Value Added by Activity,2019(in p
57、ercent)142 4.3 Semiconductor Global Value Chains and the Production Networks of ICT End Products 142 4.4 Breakdown of the Global Wafer Fabrication Capacity by Region,2019(in percent)144 4.5 Price to Book Ratios of Leading American Semiconductor Firms,2013-2022 149 5.1 Visualization of Climate Change
58、 Impacts 191 5.2 Major Economies Historical CO2 Emissions from 1830 to 2021 and their Targeting Years for Carbon Neutrality 191 5.3 Smile Curve of Value-Added vs Crying Curve of CO2 Emissions along GVCs 193 5.4 GVC-Based Accounting Framework for Tracing Emissions 195 5.5 Developed and Developing Eco
59、nomies CO2 Emissions along GVCs.197 5.6 Changing Trends and Decompositions of MNEs CO2 Emissions(2005-2016)203 5.7 Changing Trends and Decompositions of MNEs CO2 Emissions in Selected Countries 205 5.8 Decomposition of MNEs Export-Embodied Emissions(2005-2016)206 5.9 CO2 Emissions of MNEs in the Tex
60、tile Sector of Top 10 Economies(2016)207 5.10 Decomposition of Third-Country-Induced Emissions of MNEs in the Textile Sector of Selected Economies(2016)208 5.11 Component Structure of MNEs Carbon Footprints,a Producers Perspective(2016)211 5.12 Component Structure of MNEs Carbon Footprints in Select
61、ed Economies,A Consumers Perspective(2016)211Global Value Chains xi 5.13 CO2 Emissions Measured by PBA and FIBA between 2005 and 2016(Mt)214 5.14 Value-Added Calculated by PBA and FIBA between 2005 and 2016(Billion USD)215 5.15 PBA and FIBA MNEs CO2 Emissions and Value-Added of Selected Economies(20
62、05 and 2016)216 5.16 PBA and FIBA MNEs CO2 Emissions and Value-Added of the Basic Metals Sector in Selected Economies(2016)218 5.17 Cumulative Net Carbon Transfer and Incentive Fund of Advanced Economies to Emerging Markets and Developing Economies through MNEs(2005-2016)219 6.1 Overview of Greenhou
63、se Gas Emissions Across the Value Chain 230 6.2 Sri Lankas Performance in Textile and Clothing Manufacturing,19902021 234 6.3 The Plan A Model Eco-Factories 235 6.4 A Purse Seine Net 238 6.5 Leather Production in an Arzignano Tannery 241 7.1 Share of Employment by Firm Size in Developing Economies(%
64、)265 7.2 Growth in the Share of Firms Participating in GVC in the Recent Decades(20062022)266 7.3 Quality of Management Practices and GVC Participation 268 7.4 Management Quality and Language Similarities between Host and HQ Country 270 7.5 Trade Finance Rejections 273 7.6 GVC Participation and Form
65、al Share of Employment 277 7.7 Gender Wage Gap and GVC Participation 286 BOXES 1.1 Characterizing Economies Based on Differences in Current and Constant Price Estimates 16 1.2 Deriving the Number of Times a Supply Chain Passes Through a Sector 27 1.3 Calculating the Value-Added Agglomeration Index 3
66、5 1.4 Standard and Extended Input-Output Models 41 2.1 Changes in Global Trade Patterns The Rise of Electric Vehicles and the Auto Industry 67 2.2 GVC activities with FDI heterogeneity 69 4.1 ASML and the Dominant Supplier of Semiconductor Lithography Equipment 140 4.2 Intel and the American Dominan
67、ce in Integrated Device Manufacturing 146 4.3 Qualcomm and the“Double Revolution”of Fabless and Smartphones in the US154 4.4 Singapores Chartered Semiconductor Manufacturing and Failed State-Led Catching Up 160Tables,Figures,and Boxes xii 4.5 Republic of Koreas Samsung as a Successful Product of the
68、 Developmental State?162 4.6 HSMC and the Problems of Industrial Policy Implementation 164 4.7 TSMC and Technological Innovation in Chinese Taipei 166 4.8 The Impacts of US Sanctions on Huawei 177 5.1 Accounting for CO2 Emissions of MNEs in Global Value Chains 202 5.2 Sectoral Level Analysis:Textile
69、 Industry 207 5.3 Accounting for Carbon Footprints of MNEs in Global Value Chains 209 5.4 The Concept of Trade in Factor Income and its Relationship with Gross Trade Volume and Trade in Value-Added(using US exports to PRC as an example)213 6.1 The(Un)Willingness to Pay for Green:Textile Suppliers in
70、 Sri Lanka 234 6.2 The”Tuna-Dolphin Problem”and the Drivers of Global Value Chain Greening 238 6.3 Environmental Innovation in Industrial ClustersThe Arzignano Tannery District 241 6.4 Valcucine A Mentoring-Driven Approach to Product Innovation 242 6.5 When private actors and government come togethe
71、r:The Hawassa Industrial Park 244 7.1 The Importance of Language Skills for Knowledge Diffusion 270 7.2 GVCs and Returns to Education 287Tables,Figures,and Boxes Global Value ChainsxiiiForewordThe Global Value Chain Development Report 2023:Resilient and Sustainable GVCs in Turbulent Times,the fourth
72、 in this biennial series,is released at a critical juncture in the evolution of Global Value Chains(GVCs).It first provides an update on trends in GVCs highlighting that international production networks remain a central part of globalization despite mounting pressures.The report then turns to its m
73、ain theme which is informed by the fact that the intricate networks of international flows of goods,services,capital,and technology are currently facing exceptional challenges arising from geopolitical complexities and the impacts of climate change in the Post-COVID era.Recent pandemic-related disru
74、ptions have revealed long-standing vulnerabilities in GVCs,especially those associated with over-concentration and over-dependence on a single economy or region for the supply of critical products a circumstance exacerbated by recent geopolitical tensions.However,the current structure of GVCs is com
75、plex and has led to significant benefits for firms and consumers globally.It minimizes costs and maximizes scale economies since it allows economies to specialize in finely defined tasks,hyper-exploiting the concept of comparative advantage.This makes reconfigurations costly and challenging.Importan
76、tly,it also leads to significant interdependencies that limit the scope for the weaponization of trade.For example,the global semiconductor value chain is a highly efficient and innovative network resulting from the delicate division of labor and specialization,where no single economy can competitiv
77、ely maintain a complete semiconductor supply chain on its own.Hence,self-sufficiency,de-coupling and de-globalization are far from being viable options for enhancing the resilience of semiconductor GVCs in the long term.In parallel,the urgency of making GVCs greener has increased sharply with accele
78、rating climate change.At present,more than 130 economies and regions have announced their carbon neutrality targets.A global consensus has emerged on the need to address climate change and promote green development.This trend has a great impact on the direction and pattern of GVCs through both insti
79、tutional and technological innovation and collaboration.The report provides a comprehensive carbon emission accounting framework that allows tracing emissions through GVCs before proposing a conceptual framework that can help business and policymakers in their efforts to green GVCs.Resilience and su
80、stainability cannot be achieved without inclusiveness.Since the impacts of shocks tend to be unevenly distributed within economies,it is important that all parts of society are able to recover quickly for the economy as xivForeworda whole to be resilient.Integrating into GVCs leads to substantial be
81、nefits for workers and firms in developing economies,but the gains from integration are not always fairly distributed.To ensure that GVCs support inclusive development,barriers to integration must continue to be lowered and measures must be put in place that prevent firms from exploiting their marke
82、t power at the expense of small suppliers.The GVC Development Report 2023 examines all these developments and highlights how GVCs are critical factors in the megatrends shaping todays global economy.It is a joint effort of four institutions:the Research Institute for Global Value Chains at the Unive
83、rsity of International Business and Economics,the Asian Development Bank,the Institute of Developing Economies-Japan External Trade Organization,and the World Trade Organization.As the Asian Development Bank did in the previous report,the Research Institute for Global Value Chains at the University
84、of International Business and Economics has taken the lead this time.The report benefits from extensive collaboration among GVC researchers worldwide.Over 60 authors from more than 30 research institutions in 20 economies contributed 37 background papers that form the basis for this report.We look f
85、orward to expanding this research joint venture by including more partner institutions in the future.We hope that the Global Value Chain Development Report 2023 will contribute to a deeper understanding of the recent development of GVCs and help build consensus to maintain an open,sustainable,and re
86、silient global trading system in the service of human well-being.Zhongxiu ZhaoPresident of UIBEKyoji FukaoPresident of IDE-JETROMasatsugu AsakawaPresident of ADBNgozi Okonjo-IwealaWTO Director GeneralGlobal Value ChainsxvPublishing PartnersThe Global Value Chain Development Report 2023:Resilient and
87、 Sustainable GVCs in Turbulent Times is jointly published by the Research Institute for Global Value Chains at the University of International Business and Economics(RIGVC-UIBE),the Asian Development Bank(ADB),the Institute of Developing Economies Japan External Trade Organization(IDE-JETRO),and the
88、 World Trade Organization(WTO).RIGVC-UIBE is the first research institute to focus on global value chain(GVC)research.The institute is a platform for promoting GVC research by integrating research efforts and resources of universities and other research institutions,government agencies,and firms acr
89、oss the world.It runs training and degree programs on GVCs,and its resources are open to all researchers.ADB is committed to achieving a prosperous,inclusive,resilient,and sustainable Asia and the Pacific,while sustaining its efforts to eradicate extreme poverty.Established in 1966,it is owned by 68
90、 members49 from the region.Its main instruments for helping its developing member countries are policy dialogue,loans,equity investments,guarantees,grants,and technical assistance.IDE-JETRO is a research institution affiliated with the Japan External Trade Organization(JETRO),an incorporated adminis
91、trative agency under the Ministry of Economy,Trade,and Industry of Japan.IDE-JETRO does research on the economics,politics,and societies of developing countries and regions.Through its research,IDE-JETRO contributes to knowledge and a better understanding of developing economies.WTO is the only glob
92、al international organization dealing with the rules of trade.Its main function is to ensure that trade flows as smoothly,predictably and freely as possible.It also provides a forum for its members to negotiate trade agreements and to resolve the trade problems they face with each other.The overall
93、objective of the WTO is to help its members use trade as a means to raise living standards,create jobs and improve peoples lives.xviContributors CoeditorsYuqing Xing,professor,National Graduate Institute for Policy Studies,and oversea academic dean,Research Institute for Global Value Chains,Universi
94、ty of International Business and Economics(UIBE)Ran Wang,associate professor,Research Institute for Global Value Chains,and deputy director of the Global Value Chain Laboratory,UIBEDavid Dollar,senior fellow,John L.Thornton China Center at the Brookings InstiutionChapter authors DMaris Coffman,profe
95、ssor,The Bartlett School of Sustainable Construction,University College London Youyi Deng,doctoral student,School of International Trade and Economics,UIBEYuning Gao,associate professor,School of Public Policy and Management,Tsinghua University,and external expert group member of Institute of Develo
96、ping Economies Japan External Trade Organization(IDE-JETRO)s GVC research projectElisabetta Gentile,senior economist,ADB,and fellow,Global Labor OrganizationShaopeng Huang,assistant professor,Research Institute for Global Value Chains,UIBEChristian Regie Jabagat,consultant,ADBRasmus Lema,associate p
97、rofessor,United Nations University,UNU-MERIT and Professor GES 4.0,University of Johannesburg Meng Li,assistant professor,School of Environmental Science and Engineering,Shanghai Jiao Tong UniversityAngelo Jose Lumba,consultant,ADBKathryn Lundquist,economic affairs officer,WTOMahinthan Joseph Marias
98、ingham,senior statistician,Asian Development Bank(ADB)Global Value Chains xviiContributorsBo Meng,senior researcher,Development Studies Center,IDE-JETRO and visiting professor,Collaborative Innovation Center for Emissions Trading System Co-constructed by the Province and Ministry,Hubei University of
99、 EconomicsSang Hyun Park,research economist,WTORoberta Rabellotti,professor of economics,Department of Political and Social Sciences,Universit di PaviaYves Renouf,counsellor,World Trade Organization(WTO)Dalila Ribaudo,lecturer,Aston Business School,Aston University Xunpeng Shi,professor,Australia-Ch
100、ina Relations Institute,University of Technology SydneyVictor Stolzenburg,research economist,WTOKejuan Sun,lecturer,School of Economics,Henan University of Finance and LawQian Sun,post doctor,School of Economics and Business,Tsinghua UniversityEnxhi Tresa,economist,Organization for Economic Co-opera
101、tion and Development(OECD)Ran Wang,associate professor,Research Institute for Global Value Chains,and deputy director of the Global Value Chain Laboratory,UIBEYuqing Xing,professor,National Graduate Institute for Policy Studies,and oversea academic dean,Research Institute for Global Value Chains,UIB
102、EJinjun Xue,professor,Nagoya University and Tsinghua University Henry Wai-chung Yeung,distinguished professor and co-director,Global Production Networks Centre,National University of SingaporeMeichen Zhang,assistant professor,Research Institute for Global Value Chains,UIBETao Zhang,doctoral student,
103、School of Public Policy and Management,Tsinghua UniversityxviiiAcknowledgmentsThe Global Value Chain Development Report 2023,the fourth in the series,draws on contributions from 37 background papers presented and discussed at the First Authors Workshop for the Global Value Chain Development Report 2
104、023 hosted by the World Trade Organization(WTO)during 711 November 2022(Appendix 1).The drafts of the reports seven chapters were presented at the Chapter Authors Workshop for the Global Value Chain Development Report 2023 hosted by the Institute of Developing Economies Japan External Trade Organiza
105、tion(IDE-JETRO)in Japan during 5-6 June 2023(Appendix 2).The editors thank the authors of these papers and the chapters,and the discussants and participants at the two workshops,for their insightful comments and suggestions.Special thanks go to the discussants of the chapter drafts:Michele Ruta,Inte
106、rnational Monetary Fund(IMF);Etel Solingen,University of California at Irvine;Aya Okada,Nagoya University;Mari Tanaka,Hitotsubashi University;Jiantuo Yu,China Development Research Foundation(CDRF);Daria Taglioni,World Bank;Sbastien Miroudot,Organisation for Economic Co-operation and Development(OECD
107、);Seamus Grimes,National University of Ireland;Chan-Yuan Wong,National Tsing Hua University;Xiaopeng Yin,University of International Business and Economics(UIBE);Joaquim J.M.Guilhoto,IMF;Jong Woo Kang,Asian Development Bank(ADB);Jules Hugot,ADB;Angella Faith Montfaucon,World Bank;Satoshi Inomata,IDE
108、-JETRO and OECD;Ran Wang,UIBE;and Rainer Lanz,WTO.The editors are grateful to Professor Zhongxiu Zhao,the President of UIBE,Prof.Robert Koopman of the American University,and Dr.Albert Park,the Chief Economist of ADB,for their support from the reports inception to its publication.Thanks go to Willia
109、m Shaw,who edited the report;Joseph Manglicmot,who typeset the report;and Mike Cortes,who created the cover.Chapter 1s authors thank Elaine S.Tan,Joseph Ernest Zveglich Jr.,Eric Suan,John Arvin C.Bernabe,Miro Frances Capili,and Paul Dent.Chapter 2s authors thank Jules Hugot,Angella Faith Montfaucon,
110、and Satoshi Inomata.Chapter 3s authors thank William Shaw,Yue Lv,Hao Xiao and JSPS for the Research Grant(No.20K01674 and No.20KK0033),Japan,and the 111 Research Grant,B18014,China.Chapter 5s authors thank Zhi Wang,Hiromu Fukai,Tamaki Suzuki,Rumiko Nakamura,Fei Yan,Keying Wang and National Natural S
111、cience Foundation of China,No.72003023.Chapter 6s authors thank Lisa T.Ballance,Valentina De Marchi,Annelies Goger,Thiam Hee Ng,and Joseph Ernest Zveglich Jr.,Chapter 7s authors thank Weidi Yuan and Marc Bacchetta.Global Value ChainsxixAbbreviations4IRfourth industrial revolutionADBAsian Development
112、 BankADBIAsian Development Bank InstituteAEadvanced economiesAIartificial intelligenceAIDCPAgreement on the International Dolphin Conservation ProgramAIRSatmospheric infrared sounderAMDAdvanced Micro DevicesAMNEactivities of multinational enterprisesAPTassembly,packaging and testingASEANAssociation
113、of Southeast Asian NationsASMIAdvanced Semiconductor Materials InternationalASMLAdvanced Semiconductor Material LithographyBCGBoston Consulting GroupBDAbig data analyticsBPObusiness process outsourcingBRICBrazil,Russia,India and ChinaCBAMcarbon border adjustment mechanismCBDRcommon but differentiate
114、d responsibilitiesCCLControlled Commodity ListCEICChina Economic Information CenterCEOchief executive officerCERcentral east regionCFcarbon footprintCGEcomputable general equilibriumCISCommonwealth of Independent StatesCO2carbon dioxideCOPconference of the partiesCOVID-19corona virus disease 2019CPA
115、Center For Preventive ActionCPIconsumer price indexCPUcentral processing unitCSMChartered Semiconductor ManufacturingCSOcivil society organizationCSRcorporate social responsibilityDAOdiscrete,analog,and optoelectronicsDARPADefense Advanced Research Projects AgencyxxAbbreviationsDDRsdue diligence req
116、uirementsDMLdolphin mortality limitDOEdomestically owned enterpriseDRAMdynamic random access memoryDSdispute settlementDSBdispute settlement bodyDSUdispute settlement understandingDVAdomestic value addedDVARdomestic value-added ratioEARExport Administration RegulationsECRAExport Control Reform ActEC
117、TEnergy Charter TreatyEDAelectronic design automationEEBTemissions embodied in bilateral tradeEECEuropean Economic CommunityEIAEnergy Information AdministrationEMDEsemerging markets and developing economiesEoSelasticity of substitutionEPRextended producer responsibilityERSOElectronics Research and S
118、ervice OrganizationESPRITEuropean Strategic Programme for Research and Development in Information TechnologyETPeastern tropical PacificETRIElectronics and Telecommunications Research InstituteETScarbon emissions trading systemEUEuropean Union EU-ETSEuropean Union Emission Trading SchemeEUVextreme ul
119、travioletEVselectric vehiclesFDIforeign direct investmentFIBAfactor income-based accountingFIEforeign affiliateFSCForest Stewardship CouncilFVAforeign value addedG7Group of SevenGaAsgallium arsenideGATSGeneral Agreement on Trade in ServicesGATTGeneral Agreement on Tariffs and TradeGCFGreen Climate F
120、undGDPgross domestic productGlobal Value Chains xxiGFCglobal financial crisisGHGgreenhouse gasGISSGoddard Institute for Space StudiesGISTEMPGISS surface temperature analysis GPSglobal positioning systemGRSglobal recycle standardGSCMgreen supply chain managementGtgigatonGTAPglobal trade analysis proj
121、ectGVCsglobal value chainsGWgigawattHHIHirschmann-Herfindahl indexHRhuman resourcesHSHarmonized SystemIBMInternational Business Machines CorporationICintegrated circuitsICTinformation and communications technologyIDE-JETROInstitute of Developing Economies Japan External Trade OrganizationIDMintegrat
122、ed device manufacturingIEAInternational Energy AgencyIFCinternational finance centreIFSIntel Foundry ServicesILOInternational Labour OrganizationIMFInternational Monetary Fund IMOInternational Maritime OrganizationIOinputoutputIoTinternet of thingsIPintellectual propertyIPCCIntergovernmental Panel o
123、n Climate ChangeIPDCIndustrial Parks Development CorporationIRPInternational Review PanelISCOInternational Standard Classification of OccupationsISOInternational Standards OrganizationITinformation technologyITCinvestment tax creditITRIIndustrial Technology Research InstituteLCAlife cycle assessment
124、LCRlocal content requirementLEEDLeadership in Energy and Environmental DesignAbbreviationsxxiiLNGliquefied natural gasLSIlarge scale integration circuitM&SMarks&SpencerMIMICmicrowave and millimeter wave integrated circuitMMPAMarine Mammal Protection ActMNCmultinational corporationMNEsmultinational e
125、nterprisesMRIOmultiregional inputoutputMRIOTsmultiregional input-output tablesMSMEsmicro,small,and medium-sized enterprisesMTSmultilateral trading systemNAFTANorth American Free Trade AgreementNASANational Aeronautics and Space AdministrationNBERNational Bureau of Economic ResearchNDCnationally dete
126、rmined contributionNEUVLPNational Extreme Ultraviolet Lithography ProgramNGOsnon-governmental organizationsnmnanometerNOAANational Oceanic and Atmospheric AdministrationNTno-tradeNTMsnon-tariff measuresNTPsnon-trade provisionsOECDOrganisation for Economic Co-operation and DevelopmentOEMoriginal equi
127、pment manufacturerOPECOrganization of the Petroleum Exporting CountriesPBAproduction-based accountingPCpersonal computerPDCpure double countingPEFCProgramme for the Endorsement of Forest CertificationPETpolyethylene terephthalatePPIproducer price indexPRCPeoples Republic of ChinaPTApreferential trad
128、e agreementPVphotovoltaicPVHPhillips-Van-HeusenR&D research and developmentRBCresponsible business conductRBIReserve Bank of IndiaRCARadio Corporation of AmericaREACHRegistration,Evaluation,Authorization and Restriction of ChemicalsAbbreviationsGlobal Value Chains xxiiiREDIIRenewable Energy Developm
129、ent DirectiveRFIDradio frequency identification technologyROWrest of the worldRRFRecovery and Resilience FacilityRTAregional trade agreementRVCsregional value chainsSACSustainable Apparel CoalitionSCEnATsupply chain environmental analysis tool SDGsustainable development goalsSEMATECHsemiconductor ma
130、nufacturing technologySGSSocit Gnrale de SurveillanceSIASemiconductor Industry AssociationSMEsemiconductor manufacturing equipmentSMEssmall and medium enterprisesSMICSemiconductor Manufacturing International CorporationSPSsanitary and phytosanitarySVSscientific visualization studioTBTstechnical barr
131、iers to tradeTiFItrade in factor incomeTIVAtrade in value addedTRENDTRadeand ENvironment DatabaseTRIPSAgreement on Trade-Related Aspects of Intellectual Property RightsTVtelevisionUIBEUniversity of International Business and EconomicsUKUnited Kingdom of Great Britain and Northern IrelandUMCUnited Mi
132、croelectronics CompanyUNUnited NationsUNCTADUnited Nations Conference on Trade and DevelopmentUNFCCCUnited Nations Framework Conventionon Climate ChangeUPSUnited Parcel ServiceUSUnited StatesUS DoJUS Department of JusticeUS FTCUS Federal Trade CommissionUSAUnited States of AmericaUSDUnited States do
133、llarUSPTOUnited States Patent and Trademark OfficeVLSIvery large scale integration circuitWBCSDWorld Business Council for Sustainable DevelopmentWBESWorld Bank Enterprise SurveyWHOWorld Health OrganizationAbbreviationsxxivWMSWorld Management SurveyWRAPWorldwide Responsible Accredited ProductionWRIWo
134、rld Resources InstituteWTOWorld Trade OrganizationAbbreviationsGlobal Value ChainsxxvEditorial and Advisory CommitteeThe Editorial CommitteeChairpersonYuqing Xing,professor,National Graduate Institute for Policy Studies and oversea academic dean,Research Institute for Global Value Chains,University
135、of International Business and EconomicsMembersDavid Dollar,senior fellow,John L.Thornton China Center at the Brookings InstitutionElisabetta Gentile,senior economist,Asian Development Bank and fellow,Global Labor OrganizationBo Meng,senior research fellow,Institute of Developing Economies Japan Exte
136、rnal Trade Organization Victor Stolzenburg,research economist,World Trade OrganizationThe Advisory CommitteeChairpersonRobert Koopman,Professor,American UniversityMembersAlbert F.Park,chief economist,Asian Development BankSatoshi Inomata,chief senior researcher,Institute of Developing Economies Japa
137、n External Trade OrganizationZhi Wang,consulting professor and founding director,Research Institute for Global Value Chains,University of International Business and Economics and research faculty and senior policy fellow,Schar School of Policy and Government,George Mason UniversityEtel Solingen,dist
138、inguished professor and Thomas T.and Elizabeth C.Tierney Chair in Peace and Conflict Studies,University of California IrvinexxviKey Messages and FindingsI.Benefits of GVCs GVCs foster positive outcomes for firms in developing economies by improving productivity and alleviating information and financ
139、e constraints;workers benefit from higher wages and better working conditions.When GVC integration fails to deliver expected benefits,it is often due to underlying market failures such as labour market frictions,market power by large firms,and structural disparities.Policies for inclusive developmen
140、t should focus on facilitating entry into GVCs and increasing spillovers to the domestic economy.Current efforts are too often limited to improving inclusiveness exclusively within GVCs.II.Vulnerability The export value and share of potential bottleneck products had been increasing since 2000,contri
141、buting to the vulnerability of GVCs.Also,there was considerable concentration in sources of foreign value added.Trade in services was particularly affected by the pandemic and merchandise trade was negatively impacted by the rising trade tensions.The trade tensions and the COVID-19 pandemic highligh
142、ted the need to improve economies resilience and mitigate dependence on a limited number of suppliers.Digitalization was a key tool for resilience and recovery during the pandemic and facilitated access to labor supply for certain industries,especially the services sector.GVC-related trade increased
143、 in 2021 and 2022,occurring alongside considerable growth in exports.A general shortening of GVCs is also observed during these years relative to the overlapping periods of PRC-US trade tensions and the COVID-19 pandemic.III.Potential for deglobalization The PRC-U.S.trade tensions and the ongoing Ru
144、ssian war in Ukraine are having huge impacts on global energy supply chains,making geopolitical concerns the dominant factor in the policies governing energy trade.Global Value Chains xxviiKey Messages and Findings The escalating trade weaponization and trade sanctions will lead to segmented regiona
145、l energy supply chains,such as the EU-US energy supply chain and the Eurasia energy supply chain.Renewable energies are expected to play a pivotal role in reshaping the energy global supply chains and even the political landscape.Semiconductor GVCs are highly complex and well integrated across the w
146、orld with many locations involved,such that no single economy can fully control or monopolize them.The US remainsthedominant player in most key segments of these semiconductor GVCs,in particular chip design through American“fabless”firms.Current trade-distorting industrial policies pursued by many g
147、overnments attempting to“reshore”and/or“shore up”domestic semiconductor manufacturing are unlikely to be effective.IV.Greening of GVCs Since 2001,developing economies CO2 emissions from purely domestic value chains have doubled.To reduce these emissions,they need more effective policy tools.Greening
148、 their domestic production can also green their exports in GVC.To a certain extent,GVCs are more carbon-intensive than domestic activities,as they require multiple stages of production and transportation across borders.It is important to introduce carbon pricing along GVCs to substantially raise the
149、 cost of emissions globally in the Paris Agreement era.Current emission reduction targets do not explicitly define the different roles and responsibilities of GVC actors.MNEs generally capture more value added of GVCs and should play more active roles to fight climate change.Institutional drivers su
150、ch as national environmental regulations still play the leading role in GVC greening.Market and technological drivers tend to be driven by institutional drivers.If lead firms do not provide their suppliers with enough financial,managerial,and knowledge resources for implementing green strategies,sma
151、ller firms risk being left out of the chain.Accounting,monitoring,disclosing the environmental outcomes,and multilateral efforts to orchestrate and harmonize private and national initiatives are crucially important.xxviiiExecutive SummaryThe main theme of the 2023 Global Value Chain Development Repo
152、rt is the resilience and sustainability of value chains in response to the diverse shocks of recent years.It provides an overview of the most recent trends in GVCs(chapter 1),in particular the effects of trade tensions and the COVID-19 pandemic(chapter 2),as well as geopolitical tensions on GVCs.It
153、illustrates some of the effects by providing case studies on energy supply chains(chapter 3)and semiconductor value chains(chapter4).The report then turns to challenges brought about by the climate crisis.It first shows results of different methods tracing CO2 emissions through GVCs(chapter 5)and th
154、en offers a framework to help greening GVCs(chapter 6).The report concludes with emphasizing the immense potential of GVCs for supporting inclusive development(chapter 7).Examining GVCs in Times of Global ShocksChapter 1 provides an overview of recent developments in GVCs from the perspective of rec
155、ent major global shocks to international trade.Recent data showed some potential for recovery,with gross exports and GVC participation increasing from 2020an oberservation that holds true in both nominal and real terms.However,the presence of ongoing global shocks including the Russian war in Ukrain
156、e,lingering economic effects of the COVID-19 pandemic,and trade tensions between the United States and the Peoples Republic of China(PRC)may threaten to derail this trajectory,thereby promoting the need to assess potential sources of the vulnerability that GVCs have towards shocks.One such contribut
157、or is the trade in potential bottleneck products,which are characterized as having a limited number of suppliers,few substitutes,yet constituting a considerable share of international trade.A total of 1,075(out of 5,384)analyzed products were identified as potential bottlenecks in 2021,which had an
158、increasing share in total export value throughout the years.Another potential source of vulnerability is geographic concentration in value and frequency of trade.Considerable concentration in sources of foreign value added(FVA)in exports is seen even before the Global Financial Crisis(GFC)hit,though
159、 this persisted even beyond the shock and well into the post-pandemic onset world.From a frequency perspective,around 80 percent of all pass-throughs in supply chains were accounted for by only a handful of economies.Though this share decreased in 2020,which may be due to the restrictions imposed on
160、 trade and mobility,the change was only marginal and considerable concentration is still observed.The economies belonging atop the rankings in FVA sources were not necessarily the same ones that recorded the most pass-throughs,and vice versa.Global Value ChainsExecutive SummaryxxixThe calls for GVC
161、resilience were examined through an analysis of reshoring measures and other trajectories for GVC reconfiguration.Emphasis was placed on diversification of intermediate inputs as a potential risk mitigation strategy.There is still much room to diversify away from domestic sources of input,suggesting
162、 that there is already substantial home bias across economies,regions,and sectors.Looking at the case of the PRC,which recently enforced measures to encourage furthering the domestic content of its products,mixed results are seen across different types of exports,trade destinations,and sectors.Ambig
163、uity surrounding the impact of such policies warrants further statistical analysis to unveil the facilitating factors as well as barriers for realizing the goal of localization.To complement this analysis,looking at MNEs participation in GVCs through the lens of trade in factor income(TiFI)is sugges
164、ted for future research.Several studies including Gao et al(2023)found that dissimilarities exist in the activities of domestic owned versus foreign owned firms along global supply chains.For example,regional characteristics of current GVCs were discovered to be mostly attributable to domestic owned
165、 firms in each economy and that these enterprises were mostly involved in the three regional centers of North America(centered on the US),Europe(centered on Germany),and East Asia(centered on PRC),serving as the driving force for the regionalization of current supply chains.On the other hand,the val
166、ue-added creation of foreign-owned MNEs typically exhibited more global characteristics.The calls for GVC resilience were also examined through an analysis of reshoring activities.Emphasis is placed on reshoring from the perspective of domestic agglomeration.Backward and forward agglomeration indice
167、s have been on the downtrend from 2019 to 2021 in many economies,providing little evidence of reshoring activities in this period.The United States,however,showed some signs of reshoring for some of its sectors that registered increases in their backward agglomeration indices.Effect of Trade Tension
168、s and the Pandemic on GVCsChapter 2 primarily focuses on the effects of trade tensions and the COVID-19 pandemic on GVCs,as well as the effects of digital technology on the recovery and trend toward reshoring.This chapter shows that both trade tensions and the pandemic have led to substantial change
169、s in GVCs as they led to higher tariffs and non-tariff measures(NTMs).NTMs and tariffs can accumulate along GVCs as intermediate goods cross border several times,leading to higher costs for downstream producers.Global trade tensions have led to significantly higher trade costs since 2018 and pose a
170、threat to the development of GVCs.Similarly,the shocks to GVCs caused by the COVID-19 pandemic has brought significant disruption to the global economy.Executive SummaryxxxThe trade tensions increased the tariff burden of global production,especially for downstream producers.The tariffs of some inte
171、rmediate inputs imported by the PRC jumped 47%,due to the PRCs retaliatory measures and cumulative effect along GVCs.The US and the PRC incurred an additional indirect tariff burden of 10 and 6.5 billion dollars,respectively,while third-party countries incurred additional indirect tariff burden of 3
172、0%70%.Interestingly,indirect tariffs in most sectors in the PRC increased by around 50%,while they increased by more than 150%in the US.Additional non-tariff burdens induced by the trade tensions and the COVID-19 pandemic mainly affected less-flexible firms.While the trade tensions do not appear to
173、have affected total global trade volumes,they led to significant changes in the geographical patterns of GVCs.The PRC shifted its export focus to East Asia and Pacific region and Europe and Central Asia region,while the US forged closer trade ties with Canada and Mexico.Both the PRC and the US reorg
174、anized their imports from the Europe&Central Asia region,the East Asia and the Pacific region,and Latin America&Caribbean region.In contrast,the COVID-19 pandemic led to sharp decline in global trade volumes,but the process reversed quickly.Numerical modeling suggests that all economies should have
175、fully recovered by 2025,albeit at different speeds.The data also shows that non-GVC trade and trade-related activities significantly contracted during the COVID-19 pandemic,leading to an increase in pure domestic consumption.Meanwhile,cross-border trade involving MNEs slightly increased as a result
176、of stronger links between MNEs and domestic firms.The effects of digitalization on the recovery were also analyzed and further evidence was obtained in support of the hypothesis that economies with superior digital infrastructure were less affected than other economies during the COVID-19 pandemic.G
177、lobal demand for digital technology led to increased investment in high-tech industries,thereby boosting FDI-related activities.Disruptions of World Energy GVCsChapter 3 takes up the issue of how these shifts in value chains affect the world energy transition and climate governance.One major possibi
178、lity is that the EU countries may use the Russian war in Ukraine as an opportunity to speed up the development of renewable energy and realize energy transition earlier than expected.On the other hand,due to the energy crisis and the huge energy demand,some economies gave up their phasing-out-coal p
179、olicy and began to increase the use of coal and to restart coal-fired power generations.These shifts led to a temporary increase of carbon emissions and may delay the UNs net-zero emission strategy and carbon neutrality timetables.Global Value ChainsExecutive SummaryxxxiThe long-lasting PRC-US trade
180、 tensions and the ongoing Russian war in Ukraine are fueling geopolitical tensions.These geopolitical tensions have made geopolitical concerns surpass economic interests and become the dominant factor affecting world energy trade and economic development.All these dynamic movements are giving huge i
181、mpacts on global energy supply chains.Our CGE scenario analyses demonstrate that the Russian war in Ukraine and various sanctions against Russia will reshape the patterns of the world energy trade and formulate some new regional energy supply chains:the EU-US energy supply chain,the Eurasia energy s
182、upply chain,and the diamond shaped energy supply chains of US-Japan-Australia-India.The Semiconductor Supply ChainIn 2023,the global semiconductor industry has clearly reached a new critical juncture,where supply chain resilience,national security,and competition for technology leadership are challe
183、nging the highly popular and efficient“fabless”model through which chip design and semiconductor manufacturing(known as wafer fabrication in“fabs”)can be separated organizationally and geographically.The recent COVID-19 pandemic,global chip shortages,and the US export restrictions on semiconductor t
184、echnologies have accentuated worldwide attention to this important high-tech sector and its supply chain configurations.Many national governments in advanced economies have now placed far greater urgency on,and enacted specific industrial policies for,(re)building their domestic semiconductor manufa
185、cturing capacity.The rise of this new techno-nationalism is transforming the highly internationalized semiconductor industry into the age of“real nation-states should have fabs”.Chapter 4 provides substantial empirical evidence for several key observations on the global semiconductor supply chain.We
186、 find that vertical disintegration has driven the globalization of semiconductor production over time.The rise of fabless chip design firms and their manufacturing suppliers,known as foundry fabs,represents one such key driver.This“fabless revolution”starting in the US since the 1980s can be explain
187、ed by high costs in chip design and production,financial market pressures for short-term profits,and the rise of efficient foundry fabs in East Asia.We show that government support was crucial in the initial development of East Asian memory chip producers(e.g.Samsung)and foundry fabs(e.g.TSMC)in the
188、 1980s.Since 2010s,important market shifts in industrial applications towards computers/data storage and wireless communications have been crucial in explaining the rapid growth of leading fabless firms,foundry producers,and integrated manufacturing firms in microprocessors and memory chips.Executiv
189、e SummaryxxxiiMeanwhile,massive innovations in semiconductor technologies have resulted in extremely high costs of cutting-edge chip design and manufacturing since 2010.Only a few market leaders from the US,the EU,and East Asia now dominate in the different segments of semiconductor global value cha
190、ins,from design software and intellectual properties to materials and equipment suppliers.By the turn of 2020s,the ever-more sophisticated processes of chip design and production and their concomitant ecosystems of highly specialized firms mean that no single economy can be self-sufficient in the en
191、tire semiconductor value chain.In this context,semiconductor GVCs in the post-pandemic era are in transition as more national economies want to have their own fabs for national security and risk mitigation reasons.Nevertheless,we note that this pursuit of“fabs everywhere”through technological sovere
192、ignty is unlikely to be realistic because of the complex organization of existing semiconductor GVCs and the extreme demand for technological capabilities and capital investment in cutting-edge chipmaking.It will likely result in a fragmented rather than integrated global semiconductor market,which
193、would inevitably undermine the sectors economies of scale and trust relationships and,even worse,lead to excess capacity,underutilized fabs,and technological bifurcation worldwide.GVCs and Climate ChangeChapter 5s point of departure is that GVCs have led to a surge in CO2 emissions from internationa
194、l production sharing through both trade and investment(e.g.,FDI)channels.The GVC phenomenon,which involves multiple cross-border flows of intermediate goods,may complicate the implementation of the Paris Agreement,which relies on a patchwork of national policies.A persistent challenge in internation
195、al climate change negotiations is how to allocate responsibility for global warming among various participants in GVCs,such as producers,consumers,exporters,importers,investors,and investees.This chapter presents a consistent GVC accounting framework(Meng et al,2023)that allows us to trace the CO2 e
196、missions responsibility of different country-sector-bilateral combinations through various trading routes.Our results show that the emissions from production processes in developing countries,based on their own responsibility for CO2 emissions,have accounted for a large share of global emissions gro
197、wth since 2001 and reached a peak in 2019.This is worrisome because most developing countries have weaker environmental regulations and lower enforcement levels.Given the fact that GVCs are rooted in domestic sources,it is imperative to curb these emissions with more effective tools including enviro
198、nmental regulation,taxation,and the introduction of carbon trading schemes(ETS)domestically.Taking the PRC as an example(see Tang et al.2020),if more balanced regulations coverage and more equal access to the financial system for heterogeneous firms(no matter they are large-scaled or SMEs,state-owne
199、d,foreign-invested,or private firms)could be introduced,the PRCs 2030 commitment to reduce carbon emissions could be achieved more efficiently with less GDP loss(its Global Value ChainsExecutive Summaryxxxiiigreen investment would be 64%lower,and its energy efficiency would be 71%higher than in the
200、business-as-usual scenario).Once the PRC can get“greener”in its domestic production,its exports via GVCs will also be greener.Although the carbon intensity of GVCs,as measured by emissions per unit of value-added,has decreased in both developed and developing countries between 1995 and 2021,generati
201、ng GDP through international trade is still a more carbon-intensive process than generating GDP through purely domestic value chains.In this regard,introducing a Carbon Border Adjustment Mechanism(CBAM)in the context of a trade-investment-environment nexus,should be an option to promote the formatio
202、n of green GVCs in the Paris Agreement era.However,a well designed CBAM at the global level is crucial for getting consensus to increase carbon cost and reduce carbon leakage.For example,applying a GVC-based CGE simulation analysis to the EUs CBAM,(Qian et al.2023)show that GDP would rise in several
203、 EU countries,while CO2 emissions outside the EU would be reduced.However,the EUs CBAM would also trigger a slight increase in total CO2 emissions within EU due to the“rebound effects”and carbon leakage across EU countries;most countries,especially the non-EU countries,would suffer a larger decline
204、in consumers welfare.Therefore,our suggestion is that carbon border adjustment should be designed along GVCs at the country-sector-bilateral level,based on each countrys share of responsibility for CO2 emissions,rather than a simple one-way imposition like a trade tariff.In addition to looking at re
205、sponsibility at the country level,we also examine the roles of MNEs,who are the main actors in GVCs.Based on MNEs complex production arrangements,global CO2 emissions are transferred not only between investing countries(home countries)and producing countries(host countries),but also among other cons
206、uming countries(third countries)in the GVC network,which adds to the complexity of global carbon transfer.From a global perspective,about 30%-40%of MNEs carbon emissions are embodied in their exports to third countries,but these shares vary across different economies due to different FDI motivations
207、 and GVC production arrangements of MNEs.Of all these third-country induced emissions,nearly 80%of them are related to GVC activities,but this share is only 60%in India and over 90%in Australia,and the GVC position of host countries is an important factor for this difference.In the textile sector,fo
208、r example,nearly 1/3 of MNEs emissions are generated in the PRC,and 50%of them are induced by third countries,while this share is only 14%in the US and more than 90%in Viet Nam.In the motor vehicle sector,the largest emissions of MNEs are generated in South Africa,followed by the PRC and Mexico;howe
209、ver,in South Africa,over 50%of MNEs emissions are induced by third countries,while in the PRC,this share is merely 20%,and in Mexico,nearly half of MNEs emissions are induced by their home countries.The transnational investment of MNEs also affects the distribution of emission responsibility and eco
210、nomic benefits across countries.Overall,during 2005-2016,the factor income-based accounting(FIBA)value-added and CO2 emissions of advanced Executive Summaryxxxiveconomies are underestimated by 415.37 billion USD to 489.63 billion USD and 287.23Mt to 766.50Mt,respectively,while those of emerging mark
211、ets and developing economies are overestimated.The latter bears some of the emission responsibility of the former,which partly supports the pollution haven hypothesis.From the national perspective,major FDI-outflowing economies receive more factor income and incur less environmental cost,while major
212、 FDI-inflowing economies receive less factor income and incur more environmental cost.As of 2016,the cumulative net carbon transfers from advanced economies to emerging markets and developing economies through MNEs investment amounted to 1800.80 Mt.If this environmental cost is converted into incent
213、ive funding,it would provide an additional 26.61 billion USD to supplement the Green Climate Fund(GCF).Our research provides a useful reference point for future negotiations of carbon responsibility sharing across countries and offers a feasible way for financing the GCF,which will facilitate the ac
214、hievement of the net-zero emission target consistent with the Paris Agreement.Although there is a general agreement on the principle of“common but differentiated responsibilities”(CBDR)among the international community,many challenges remain in implementing it effectively.Given the increasing diffic
215、ulty of limiting global warming to 1.5C and the fact that most developing countries have no absolute emissions reduction targets and relatively weak environmental regulations,it is crucial to help these countries set appropriate and ambitious targets for reducing carbon emissions and/or achieving ca
216、rbon neutrality,which could help curb the current rapid rise in global CO2 emissions.The Paris Agreement allows countries to start from different points and pursue different ambitions toward their own carbon neutrality goal,and uses production-based accounting to measure their emissions(e.g.,the ori
217、ginal idea of carbon neutrality at the individual country level means taking full responsibility for all direct and indirect emissions),without explicitly considering the responsibility sharing of carbon leakage caused directly and indirectly by international trade and investment.This implies that a
218、 net carbon exporting country and a net FDI inflow country might bear more responsibility in achieving its own carbon neutrality goal,while a net carbon importing country and a net FDI outflow country might bear less responsibility than needed.In this sense,negotiating about responsibility sharing f
219、or carbon leakage across countries is inevitable if we want to achieve the global goal of net-zero emissions.GVC Greening:A Conceptual Framework for Policy ActionThe environmental impact of GVCs can be decomposed into three different mechanisms.First,a scale effect,whereby an increased level of prod
220、uction leads to increased transport volumes and travels,waste production,and overexploitation of scarce resources,with detrimental effects on the environment.The second mechanism is the composition effect,whereby GVCs break up the production process into tasks that can be shifted from one location t
221、o another.This leads to environmental benefits Global Value ChainsExecutive Summaryxxxvwhen production tasks are relocated where it is the most efficient,or environmental costs when carbon-intensive tasks are relocated to jurisdictions with lax regulations.The third and last mechanism is the techniq
222、ue effect,whereby knowledge flows among firms along a value chain facilitate the development,adoption,and adaptation of environment-friendly production techniques.The phenomenon of net environmental gains from the introduction of environmental innovation into GVCs is commonly referred to as GVC gree
223、ning.Chapter 6 presents a conceptual framework to investigate:(i.)why GVC greening occurs;(ii.)the types of environmental innovation undertaken in GVCs;(iii.)the actors involved;(iv.)how the greening occurs in GVCs and their different stages;and(v.)the outcomes of GVC greening.The framework lays the
224、 foundation for a discussion of policy actions aimed at maximizing net environmental gains through the technique effect(GVC greening)and establishing strong accountability mechanisms to discourage pollution outsourcing.The chapter reaches three key conclusions.First,while GVC greening has institutio
225、nal,market,and technological drivers,institutional drivers still play the leading role.New policies and legislation related to domestic or global sustainability transformation agendas are central to GVC greening.Market and technological drivers are also important,but tend,ultimately,to be driven by
226、institutional issues.Promoting such drivers requires a shared effort among institutional actors at national and global levels.However,as advanced economies are increasingly competing to gain competitive advantage in new green technologies,domestic policies play a greater role than global concerns.Go
227、vernments turning sharply away from multilateral cooperation may pose a major challenge to promoting environmentally friendly GVCs.A way forward to safeguard multilateralism and global institutional drivers sustaining GVC greening is to invest in initiatives developed among smaller groups of like-mi
228、nded economies.One example is the Breakthrough Agenda,involving 45 economies and the private sector to accelerate the shift to green technology in different industries.Coordination at the global level,e.g.,a single international carbon tax rate,might also help promote the transition towards the net-
229、zero emission goal.The second key message is that several actors,not only lead firms but also suppliers,national and local governments,and often a combination of them,contribute to GVC greening.In some cases,suppliers anticipate future environmental requirements to leverage their environmental upgra
230、ding initiatives as a competitive factor to access new buyers and markets.Executive SummaryxxxviHowever,the greening opportunities may not be equal among suppliers.Several studies show that lead firms do not always provide enough financial,managerial and knowledge resources for their suppliers to im
231、plement green strategies,leaving them out of the chain if they are unable to meet such requirements.This risk is particularly high for small firms in developing economies but also in developed ones.Uneven distribution of costs,benefits,and rewards for greening value chains poses a challenge for poli
232、cymakers to address this supplier-squeeze.Actors external to the GVC,such as national or local governments,NGOs,and independent certification bodies,can provide technical and financial support to suppliers in GVCs to implement environmental innovations.National or sub-national public actors can prov
233、ide the basic infrastructure that contributes to GVC greening.Finally,there is very limited evidence on the biophysical outcomes of GVC greening.There are important tradeoffs between environmental and socioeconomic outcomes,and the final assessment of whether GVC greening happens or not generally re
234、mains a research gap in most of the existing studies.Therefore,accounting,monitoring,and disclosing the environmental outcomes and the possible tradeoffs with socioeconomic outcomes are challenging but essential dimensions to investigate along the entire value chain.However,once again the transbound
235、ary nature of GVCs poses a challenge that requires multilateral efforts to orchestrate and harmonize private and national initiatives to monitor environmental outcomes.Towards Inclusive GVCs Chapter 7 explores the role of GVCs in driving inclusive development within developing economies.Inclusivenes
236、s is a key aspect of resilient and sustainable GVCs.As the backlash against globalization in advanced economies has shown,rising inequality can lower political support for trade and increase barriers to GVC integration.Moreover,since the impacts of shocks tend to be unevenly distributed within econo
237、mies,it is important that all parts of society are able to recover quickly for the economy as a whole to be resilient.GVCs can also accelerate(green)technology diffusion from technological leaders to the less innovative.Therefore,by prioritizing inclusiveness,GVCs can play a pivotal role in building
238、 sustainable and resilient economies for the benefit of all stakeholders.The topic of this chapter holds more significance than ever for two reasons.First,the negative shocks prompted by the COVID-19 pandemic,geopolitical tensions,and the environmental crisis have been shown to disproportionately hu
239、rt certain groups within developing economies,such as low-skilled workers,female employees and MSMEs.Second,consumers are increasingly aware of the spillover effects of their choices on workers in developing economies.This has triggered renewed efforts by policymakers and investors Global Value Chai
240、nsExecutive Summaryxxxviito address inclusiveness in supply chains.Ensuring that the resulting policy responses are grounded in solid evidence is important for them to achieve lasting improvements.The chapter has two key messages:First,GVC integration leads,on average,to better outcomes for firms an
241、d workers in developing economies.The evidence consistently shows that local suppliers to MNCs and firms exporting intermediates outperform other firms in developing economies.In particular,GVCs provide MSMEs with chances for quality upgrading,knowledge spillovers,technology transfers,and innovation
242、 through their affiliations with lead firms.The chapter shows in this regard that firms in developing economies with higher GVC integration tend to have substantially better management practices.Furthermore,becoming part of GVCs can assist in alleviating credit constraints,a substantial challenge en
243、countered by MSMEs.The performance premium spills over to workers as well.Being employed at MNCs or their suppliers generally results in higher wages and better working conditions,including a higher likelihood of formal employment.For instance,in Cambodia,a surge in garment exports to the EU induced
244、 a 16-22 percent increase in employment at formal establishments.Women often benefit from these developments in particular.However,several non-trade related constraints,like access to education,limit their upgrading opportunities.In this regard,the chapter shows that GVC integration lowers gender wa
245、ge gaps in low-skill occupations but has essentially no effect on inequality at high-skill occupations such as managerial positions.The second key message is that where GVC integration fails to deliver or underdelivers on benefits,it tends to be caused by underlying market failures and policy barrie
246、rs rather than GVC integration itself.An important example is market power.Both monopolistic/oligopolistic and monopsonistic/oligopsonistic behaviour of firms on product and labour markets can severely skew the distribution of profits in value chains and put undue pressure on local suppliers to cut
247、costs with negative implications for workers.The chapter highlights a study showing that the income of Ecuadorian farmers in agricultural GVCs would be 77%higher if intermediaries behaved competitively.Other key factors are limited adaptive capacity due to incomplete financial or labour markets in d
248、eveloping economies.These two findings have important policy implications.Since GVC integration tends to benefit firms and workers,the focus should be on facilitating entry into GVCs and spillovers to the domestic economy to ensure that GVCs are truly inclusive.To maximize the potential of GVCs for
249、inclusive development,it is crucial to address the underlying market failures and barriers that lead to an uneven distribution of the gains from GVCs.Executive SummaryxxxviiiThe current policy focus is on non-trade provisions(NTPs)in regional trade agreements,import bans and restrictions,and due dil
250、igence requirements(DDRs).However,these policies often aim at improving working conditions exclusively within GVCs even though the evidence suggests that workers and firms within GVCs already enjoy better outcomes.As a result,they might aggravate existing differences between those inside and those o
251、utside GVCs.Moreover,many of these policies have been shown to produce adverse effects.The inclusion of NTPs in trade agreements can potentially hinder country-level inclusion in GVCs by raising costs and uncertainty.DDRs appear to assume that firms willingly underpay workers or refuse to improve wo
252、rking conditions,but this is not in line with the evidence.To make sure that these policies work in favour of inclusive development,they should be accompanied by more cooperation and take into account the lessons from the academic literature.David DollarSenior Fellow John L.Thornton China Center at
253、the Brookings InstitutionExamining Global Value Chains in Times of International ShocksMahinthan Joseph Mariasingham,Angelo Jose Lumba,Christian Regie Jabagat1.1IntroductionEven before the beginning of the coronavirus disease(COVID-19)pandemic in early 2020,the pace of globalization had already slow
254、ed.What once was an era of booming cross-border transactions,pushing the frontiers of international trade at the turn of the century,becamequite abruptlya period of stagnating export and import activity.This dramatic shift from“hyperglobalization”(Subramanian and Kessler 2013)to“slowbalization”(The
255、Economist 2019)occurred as the world dealt with the vestiges of the 2008 global financial crisis(GFC).The crisis ushered in skepticism towards globalization,along with renewed motivation to reconfigure the emerging architecture of international trade known as global value chains(GVCs).Global trade w
256、ould then be disrupted further by trade tensions between the Peoples Republic of China(PRC)and the United States(US),with these two economic powerhouses and major players in GVCs imposing tariffs against each other to reshore manufacturing jobs.By 2019,these tensions had escalated and threatened to
257、stifle export activities at a global scale.A global pandemic was officially declared by the World Health Organization(WHO)on 11 March 2020,as COVID-19 spread rapidly worldwide.Along with it came unprecedented,and at times radical,modifications to economic and social activities,each geared towards th
258、e unified goal of controlling the speed and extent of COVID-19 transmission.Mobility restrictions such as lockdowns,quarantine and isolation,curfews,and travel controls were instituted in certain parts of the world,severely impacting key service sectors such as entertainment,leisure,and tourism.Some
259、 businesses that were deemed“nonessential”were even ordered to close,while a few others were allowed to operate at only limited capacity.1Note:Chapter contributed by the Asian Development Bank(ADB).The views expressed are those of the authors and do not necessarily reflect the views and policies of
260、ADB or its Board of Governors or the governments they represent.Global Value Chain Development Report 20232Industries that did not face such stringent constraints did,however,also face their own issues.For instance,the purchasing managers index of supplier delivery times in the manufacturing sector
261、showed a decline from 49.4 in January 2020 to 37.7 in April 2020,indicating longer lead times and capacity constraints,e.g.,intermediates and labor supply shortages and transportation delays(CEIC 2022;Attinassi et al.2021).In addition,the shipping and distribution industryone of the main components
262、of international logistics and playing a fundamental role in the functioning of supply chainshad to curtail its capacity at the start of the pandemic to adjust for an observed drop in demand.Then,however,came a surge in logistics demand attributed to national stimulus policies and an increase in pur
263、chases of household goods and electronics,causing an imbalance and leading to notable port congestion and record container freight rates soon after(UNCTAD 2022).Concerns about the risks and uncertainties surrounding GVCs were reinvigorated because of pandemic policies and events.While such risks hav
264、e always been present,even in the absence of shocks,multiple crises since the turn of the millennium have made them more salient over time.Chapter 1 of the GVC Development Report 2021 left readers wondering whether the same trend of stagnation in supply chains would persist,or even worsen,during the
265、 pandemic.This was especially concerning since the expansion of GVCs relies heavily on large-scale investments,which are fundamentally built on confidence derived from a good,stable,and predictable business environment.Fortunately,signs of recovery in GVCs have already been reported due to concerted
266、 efforts to fend off the spread of COVID-19,worldwide adoption of digital technologies,and a return to past conceptions of“normalcy”that ultimately saw suspended economic and social activities resume.This renewed stability,however,is once again threatened by the Russian war in Ukraine,which has trig
267、gered an increase in commodity prices since the beginning of 2022.This first chapter of the Global Value Chain Development Report 2023 is based on the premise of successive shocks.The structure of gross exports and trends in GVC participation are first examined in the context of major recent disrupt
268、ions to the global economy.During the initial years of the Global Financial Crisis(GFC),PRCUS trade tensions,and the COVID-19 pandemic,significant declines in exports were observed alongside decreasing shares of GVC-related trade to gross exports.A general shortening of GVCs also occurred from 20072
269、009(GFC)while a lengthening transpired from 20182020(combined PRCUS trade tensions and COVID-19 pandemic).As considerable price changes were commonly experienced during these periods,a comparison of GVC-related metrics in nominal and real terms is also conducted to determine if any noticeable deviat
270、ions occurred in instances of“abnormal”trade activity.The chapter also investigates the evolving discourse on risks surrounding international trade and GVCs.Three characteristics that can give way to vulnerabilities are explored:trading of risky products,concentration in sources of value-added,and c
271、oncentration in Global Value ChainsExamining Global Value Chains in Times of International Shocks3frequency of engagement in supply chains.The annual aggregate export value and share of potential bottleneck productsbased on market concentration,market relevance,and market substitutabilityhad been in
272、creasing since 2000.On the other hand,there has always been considerable concentration in sources of foreign value added and pass-through frequency in supply chainsan observation that holds true before,during,and after periods of global shocks.Lastly,the chapter discusses reconfiguration strategies
273、that governments and enterprises can explore to help mitigate negative impacts associated with shocks to GVCs,namely replication,diversification,regionalization,and reshoring.It is shown that while export diversification across economies worldwide remained quite high over time,agglomeration indicesi
274、n generalprovided little evidence of reshoring activities.1.2Global Value Chains During Periods of ShocksAlready this century,there have been four major global shocks to international trade.The first major shock was the GFC,which is widely considered to have reached its peak in 2008.Its origins can
275、be traced back to the mid-2000s,when the housing bubbledriven by a combination of improved access to credit and low-interest rates on mortgagestook place in the US.As financial institutions witnessed the ensuing increase in mortgages,they began offering subprime mortgages,even to borrowers with poor
276、 credit histories(Loo 2020).These instruments,called“mortgage-backed securities”,were sold globally to investors as more complex securities,making them difficult to assess in terms of value and risk.Eventually,homeowners,who had no true means to keep up with their mortgages in the first place,starte
277、d defaulting on their mortgages.This caused significant drops in the value of mortgage-backed securities and,subsequently,enormous losses for the global financial system,which had become highly interconnected.The subsequent freeze in lending and loss of confidence in the financial sector developed i
278、nto a worldwide recession,characterized by depressed demand for highly tradable goods,plummeting business revenues,and widespread job losses.In fact,the fallout from the GFC led to global gross domestic product(GDP)contracting by 5.2%,as well as a decline of around 10.4%in global trade of goods and
279、services in 2009.This drop in world trade was even more abrupt than the decline during the start of the Great Depression in 1929(Eichengree and ORourke 2009).The immediate,simultaneous impacts on incomes worldwide can be attributed to the increasing synchronization of economic activity,with national
280、 GDP being correlated globally(Baldwin 2009;World Bank 2020).1 1 This is in line with studies that investigated the pattern of higher business cycle correlations among economies with deeper integration in GVCs(Burstein,Kurz,and Tesar 2008).Global Value Chain Development Report 20234A closer look int
281、o the structure of exports provides valuable insight into how GVCs fared during and after the GFC.Applying the decomposition framework of Borin and Mancini(2019),it can be seen in Figure 1.1 that gross exports increased from around$16 trillion to$18 trillion from 2007 to 2008.At the time,domestic va
282、lue-added that is directly absorbed by the importer(DAVAX)held the lions share,comprising more than 50%of the value of gross exports,while foreign value-added(FVA)took up around 25%.By 2009,however,exports had contracted by around 20%,with the share of DAVAX increasing by 3.805 percentage points and
283、 that of FVA,domestic value-added sent to the importer then reexported and eventually absorbed abroad(REX),and domestic value-added sent to the importer then reexported and eventually absorbed back by the exporter(REF)decreasing by 2.338,1.155,and 0.114 percentage points,respectively.World trade sho
284、wed signs of improvement in the years that followed,and even surpassed pre-crisis levels(in nominal terms)as early as 2011.In addition,shares of all value-added components became more stable and predictable.Figure 1.1:Decomposition of World Exports,20072022200720082009200016201
285、72002202530Trillion USDDAVAXREXREFFVAPDC$=United States dollars,DAVAX=domestic value-added directly absorbed by the importer,FVA=foreign value-added,PDC=pure double counting,REF=domestic value-added sent to the importer then reexported and eventually absorbed back by the export
286、er,REX=domestic value-added sent to the importer then reexported and eventually absorbed abroad.Note:Gross exports decomposition follows the framework of Borin and Mancini 2019.Sources:Asian Development Bank Multiregional Input-Output Database;and Asian Development Bank estimates.Also following the
287、framework of Borin and Mancini(2019),Figure 1.2 depicts the worlds tradebased GVC participation rates from the perspective of backward and forward linkages.Forward GVC participation refers to the share of REX and REF in total exports:it is indicative of how an economy exports domestically produced G
288、lobal Value ChainsExamining Global Value Chains in Times of International Shocks5inputs to its trading partners for further processing in downstream production stages(WTO n.d.).Backward GVC participation takes the share of FVA and the pure double counting2(PDC)term in total exports:it is an indicato
289、r of the extent of an economys use of foreign-sourced intermediates in the production of goods and services for export.Figure 1.2 shows that,from 1995 until the peak of the GFC in 2008,the phenomenon of hyperglobalization was quite apparent,with forward GVC participation increasing from 15.68%to 19.
290、28%and backward GVC participation growing from 19.52%to 26.22%over the 13-year period.In 2009,as the world attempted to deal with the aftermath of the GFC,both participation rates decreased and seemed to have stagnated in the years that followed.As mentioned above,the subprime mortgage crisis led to
291、 a sharp contraction of consumer durable goods,such as automobiles and machineries,especially in developed economies(Eaton et al.2016).This reduction in demand for final goods also drove trade trends via intermediate parts and components required to manufacture those goods(Ferrantino and Larsen 2009
292、),which was reflected by the drop in both GVC participation 2 These are value-added items that are recorded more than once in a gross trade flow resulting from the back-and-forth transactions involved in cross-border production processes(Koopman,Wang,and Wei 2014)Figure 1.2:Backward and Forward Glob
293、al Value Chain Participation Rates,World,19952022BackwardForward52068PercentNotes:Global value chain(GVC)participation rates are calculated following the framework of Borin and Mancini 2019.Backward GVC participation is the ratio of the sum of foreign value-added(FVA
294、)and pure double counting(PDC)to exports.Forward GVC participation is the ratio of the sum of domestic value-added sent to the importer then reexported and eventually absorbed abroad(REX)and domestic value-added sent to the importer then reexported and eventually absorbed back by the exporter(REF)to
295、 exports.Sources:For 19952006:World Input-Output Database,2013 Release.For 20072022:Asian Development Bank Multiregional Input-Output Database;and Asian Development Bank estimates.Global Value Chain Development Report 20236rates.In terms of overall GVC participation3 almost all economies rates fell
296、compared to 2007 as seen in Figure 1.3.However,GVC-related trade seemed to have recovered quite speedily as these rates rebounded in 2010,with a few exceptions including Cambodia,Fiji,Kazakhstan,Lao PDR,Maldives,Philippines,and Thailand.For each economy-sector pairing,the average GVC production leng
297、th was also calculated using the methodology of Wang et al.(2017).This gives the average number of stages that separate domestic value-added creation in intermediate products to its final consumption(ADB 2023a).World level measures were derived as weighted averages,with each economys share in global
298、 total value added used as shares.From 2007 to 2009,average GVC production lengths of sixteen sectors,comprised mostly of services and low-technology manufacturing sectors,shortened(Figure 1.4).As an aggregate,a shortening is also observed with the GVC production length going down from 8.75 in 2007
299、to 8.73 in 2009.This could have resulted from the decline in GVC participation,possibly characterized by increased reliance on domestic sources of value-added or even a temporary concentration of production processes towards a few economies.On the other hand,a lengthening of GVC production lengths w
300、as recorded for all sectors classified as medium-to high-technology.By 2010,a general lengthening of GVCs occurred with a large majority of sectors recording higher production lengths compared to 2009.The second major global trade shock was caused by trade tensions between the PRC and the US,which b
301、egan in 2018 before intensifying in 2019.The US administrations concern with the longstanding trade deficit it had with the PRCalongside a gamut of other apprehensions related to intellectual property,national security,and quality of trade policiesgradually escalated into US imposition of tariffs an
302、d trade barriers on a few products from the PRC,which then retaliated with its own tariffs on US goods and services.This initial exchange was eventually extended with tariffs from both economies on a wider range of products,negatively impacting industrial sectors and significantly hurting trade betw
303、een the two.With the PRCs role as a supply-and-demand hub in simple GVC networks,and the US being an important hub in complex GVC networks(Li,Meng,and Wang 2019),supply chains and markets worldwide were disrupted soon after.The impacts of PRCUS trade tensions on GVCs are demonstrated back in Figure
304、1.1,which shows world exports falling by around 6.8%($25.52 trillion to$23.78 trillion)from 2018 to 2019.In 2017,the share of DAVAX went down by 2.417 percentage points,but then increased as the PRCUS trade tensions commenced(by 0.336 percentage points in 2018 and by 2.757 percentage points in 2019)
305、.FVA,on the other hand,registered an increase of 1.643 percentage points in 2017,before consecutive dips of 0.245 and 1.747 percentage points in 2018 and 2019,respectively.Declines in REF and REX can also be seen in 2018 and 2019,respectively.3 This is simply derived by adding the backward GVC parti
306、cipation rate and forward GVC participation rate of an economyGlobal Value ChainsExamining Global Value Chains in Times of International Shocks7Figure 1.3:Global Value Chain Participation of Economies,20072010 and 20182022LUXMLTHUNSVKTAPSINCZEMALBELBGRESTSVNIRETHAPHIDENAUTPOLKGZMONKORNETSWELVAFINLTU
307、HRVMLDKAZROMWLDVIENORGERPORFRACYPGRCRUSSWISPAFIJMEXITAUKGAUSINOSRICAMTURBRUHKGJPNINDPRCUSCANBHUBRANEPLAOPAKBAN200730%40%50%60%70%30%40%50%60%70%LUXMLTHUNSVKTAPSINCZEBELBGRESTLTUSVNIREVIEAUTNETGRCCYPLVAMALPORPOLDENROMFINKORNORGERKUWTHAMEXSWIROWSWEHRVFRAWLDKAZGEOSPAMLDTURITARUSBRUUKGKGZARMCAMPHISAUBHU
308、MONNEPCANHKGUAELAOINDJPNUSFIJINOSRIAUSEGYCOLPRCBRAECUBANNZLPAK2009200212022ARM=Armenia;AUS=Australia;AUT=Austria;BAN=Bangladesh;BEL=Belgium;BGR=Bulgaria;BHU=Bhutan;BRA=Brazil;BRU=Brunei Darussalam;CAM=Cambodia;CAN=Canada;COL=Colombia;CYP=Cyprus;CZE=Czech Republic;DEN=Denmark;ECU=Ecuador;E
309、GY=Egypt;EST=Estonia;FIJ=Fiji;FIN=Finland;FRA=France;GEO=Georgia;GER=Germany;GRC=Greece;HKG=Hong Kong,China;HRV=Croatia;HUN=Hungary;IND=India;INO=Indonesia;IRE=Ireland;ITA=Italy;JPN=Japan;KAZ=Kazakhstan;KGZ=Kyrgyz Republic;KOR=Republic of Korea;KUW=Kuwait;LAO=Lao Peoples Democratic Republic;LTU=Lith
310、uania;LUX=Luxembourg;LVA=Latvia;MAL=Malaysia;MEX=Mexico;MLD=Maldives;MLT=Malta;MON=Mongolia;NEP=Nepal;NET=Netherlands;NOR=Norway;NZL=New Zealand;PAK=Pakistan;PHI=Philippines;POL=Poland;POR=Portugal;PRC=Peoples Republic of China;ROM=Romania;RUS=Russia;RoW=Rest of the World;SAU=Saudi Arabia;SIN=Singap
311、ore;SPA=Spain;SRI=Sri Lanka;SVK=Slovak Republic;SVN=Slovenia;SWE=Sweden;SWI=Switzerland;TAP=Taipei,China;THA=Thailand;TUR=Trkiye;UAE=United Arab Emirates;UKG=United Kingdom;US=United States;VIE=Viet Nam,WLD=World average.Notes:Global value chain(GVC)participation rates are calculated following the f
312、ramework of Borin and Mancini 2019.It is the ratio of GVC-related tradei.e.,sum of domestic value-added sent to the importer then reexported and eventually absorbed abroad(REX),domestic value-added sent to the importer then reexported and eventually absorbed back by the exporter(REF),foreign value-a
313、dded(FVA),and pure double counting(PDC)to exports.Sources:Asian Development Bank Multiregional Input-Output Database;and Asian Development Bank estimates.Global Value Chain Development Report 20238Figure 1.4:Global Value Chain Production Lengths by Sector,World,20072010 and 20182022 PrimaryBusiness
314、services Low-technology manufacturing Personal and public services Medium-to high-technology manufacturingAggregate7891078910Lengthened7892009200920991020202021LengthenedShortenedShortenedNotes:Global value chain production lengths are the sum of backward and forward
315、 lengths.These are computed following the methodology of Z.Wang,S.Wei,X.Yu,and K.Zhu.2017.Characterizing Global Value Chains:Production Length and Upstreamness.NBER Working Paper.No.23261.Cambridge,MA:National Bureau of Economic Research.Sources:Asian Development Bank Multiregional Input-Output Data
316、base;and Asian Development Bank estimates.When it comes to GVC participation,as shown in Figure 1.2,backward rates went down by a total of 1.835 percentage points from 2017 to 2019,while forward rates decreased marginally from 19.45%to 18.85%.The impacts of the PRCUS trade tensionsat least from the
317、perspective of GVCsappear to be less than those caused by the GFC.This may be due to a variety of factors,including trade redirection and the extent of digitalization.Global Value ChainsExamining Global Value Chains in Times of International Shocks9The third major shock to international trade was th
318、e COVID-19 pandemic,which emerged while PRCUS trade tensions were still present.The shock began as a negative supply crisis,with infection containment measures disrupting the normal functioning of businesses,logistics,and supply chains,while also limiting the availability of labor.It eventually spre
319、ad to demand channels(Brinca,Duarte,and Faria-e-Castro 2020;Del Rio-Chanona et al.2020)as consumer spending and investment declined.In contrast with the GFC,which saw depressed demand in durable and investment goods,the decline in services trade was more severe during the pandemic(World Bank 2021;WT
320、O 2021).However,with emphasis on public health and safety requiring the sudden confinement of social activities to peoples homes,the demand for consumer electronics and home appliances,along with medical supplies,surged(Ossa and Le Moigne 2021).Computers and laptops,for instance,recorded the largest
321、 growth in exports from 2019 to 2020,reaching roughly$28 billion(ADB 2022).The increased global adoption of digital technology is also widely regarded as a key development during the COVID-19 pandemic.Digitalization enabled enterprises to maintain operations and even accelerate commercial trends in
322、consumer electronics,thereby mitigating trade shocks from both the supply and demand sides(OECD 2020;WTO 2021).Even though not all e-commerce sales entail cross-border trade,the expansion in retail trade via mail orders or the internet resulted in remarkable development in the e-commerce sector thro
323、ughout 2020(WTO 2021).Companies such as United Parcel Service(UPS)and PayPal reported substantial growth in crossborder shipment volumes(Fitzpatrick et al.2020).Another prominent trend observed during the pandemic was the considerable level of government response,with stimulus packages and labor mar
324、ket support,e.g.,employment retention programs,helping to prevent worst-case scenarios from eventuating.Accumulated fiscal and monetary stimulus in 2020 and early 2021 reached a historic level of more than 15%of global GDP(IMF 2021).In fact,in advanced economies,the value of fiscal and monetary supp
325、ort was equivalent to about 25%of their GDP.In low-income economies,the equivalent figure was below 3%of GDP,suggesting a degree of heterogeneity according to the economies development status.By contrast,during the GFC,the financial sector disruptions made it more difficult to obtain the trade finan
326、ce necessary to jumpstart recovery of international business activities(Ahn,Amiti,and Weinstein 2011;Chor and Manova 2012;WTO 2021).As a side note,due to the overlapping timelines between the PRCUS trade tensions and the COVID-19 pandemic,it is challenging to attribute observations for 2020 onwards
327、to one or the other of these crisesat least from a measurement perspective.It is reasonable to treat observations on economic trends and patterns as the compounded effects of both crises,especially in the absence of a carefully crafted way of disentangling their impacts.Global Value Chain Developmen
328、t Report 202310With this in mind,world exports declined by only 9.12%in 2020,which is around 11percentage points lower(in absolute value)compared to 2009(Figure 1.1).The share of DAVAX also increased marginally(0.398 percentage points)in the same year,while those of FVA,REX,and REF all decreased.In
329、2021,exports suddenly grew by around 24.57%,with the total value reaching a peak(in nominal terms)of approximately$26.92 trillion.The trends in the shares of DAVAX and other value-added components of gross exports were also reversed for the year.Meanwhile,GVC participation rates continued to decline
330、 from 2019 to 2020,albeit quite marginally at 0.1 of a percentage point(Figure 1.2).This may be due to the considerable slumps in GVC participation in 2019,which left little room for further contraction.Recovery in 2021 was quite instantaneous as both backward and forward rates came very close to re
331、aching their values from 2018 and before.It is also worth noting that,except for a few(e.g.,Bangladesh,Kazakhstan,Maldives,Nepal,Sri Lanka,Taipei,China,and United Kingdom)economies with large business service sectors,almost all registered higher overall GVC participation rates in 2021 relative to 20
332、19 as seen in Figure 1.3.This signifies that the service sector lagged in terms of recovery relative to its manufacturing counterparts,thereby having a prolonged impact on service-oriented economies.In contrast to the GFC,a general lengthening of GVCs took place from 2018 to 2020(Figure 1.4).Twenty-
333、three sectors across all aggregate categories(i.e.,primary,low-technology manufacturing,medium-to high-technology manufacturing,business services,and personal and public services)had higher GVC production lengths,which indicates that the combined impact of the PRCUS trade tensions and COVID-19 pandemic were felt across the board.Such a lengthening could be attributed to the trade redirection resul