China’s Evolving Role in Global Value Chains: Upgrading Strategies in an Era of Disruptions and Resilience

Abstract

China’s role in global value chains (GVCs) has changed fundamentally in recent decades. The country has moved from being the world factory for a diverse range of low-tech, mid-tech, and high-tech consumer goods to the goal of becoming a technological leader in sectors linked to advanced manufacturing, cloud computing, artificial intelligence, electric vehicles, and new e-commerce and internet-related production networks while lessening its dependence on the United States and other traditional export markets by focusing on its domestic market and emerging regional markets. China has achieved this transformation in its development trajectory by combining two drivers of change: upgrading from above and upgrading from below. While upgrading from above refers to the relatively familiar set of programs introduced by China’s central government that chart strategic shifts and new goals for the economy as a whole, upgrading from below is equally important but less well understood. It refers to the diverse set of local policies and firm-level activities at the provincial, regional, and city government levels that are required to implement and institutionalize China’s national programs and policy directives. The chapters of this book illustrate how upgrading from below works in practice in China and they suggest new research insights on how to analyze GVCs in China and other developing economies.