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Author(s)
Mihir P. Torsekar
This article discusses China’s transition towards higher-value-added segments of the medical device global value chain (GVC) as observed through changes in both the composition of foreign direct investment (FDI) and in the technological complexity of its medical device exports. The period under review is primarily 2003–17.
Author(s)
David Coffin , Jeff Horowitz
Electric vehicles (EVs) are a growing part of the passenger vehicle industry due to improved technology, customer interest in reducing carbon footprints, and policy incentives. EV batteries are the key determinant of both the range and cost of the vehicle. This paper explains the importance of EV batteries, describes the structure of the EV battery supply chain, examines current limitations in trade data for EV batteries, and estimates the value added to EV batteries for EVs sold in the United States.
Author(s)
Mihir P. Torsekar, John VerWey
This paper traces the East Asia-Pacific (EAP) region’s participation in the global value chain (GVC) for electronic products over the past 20 years, with particular attention to trade in intermediate goods and recent foreign direct investment (FDI) into the region. During this time, China has been the principal driver of the GVCs for electronic products. However, recent increases in China’s production costs have created opportunities for other countries in the region—such as Malaysia, Singapore, Thailand, and Vietnam—to increase their participation in the sector’s GVC. In discussing these trends, this paper uses the World Bank’s Measuring Competitiveness in Global Value Chains (MC-GVC) database and provides a case study on the development of the semiconductor industry’s presence in the EAP region to illustrate the region’s role in the GVC for electronic products.
Author(s)
Lin Jones, Meryem Demirkaya, Erika Bethmann
The development of global value chains (GVCs) and their economic impact on countries, industries, and firms has been much discussed in the business and economics literature. This introductory paper reviews and highlights some of the key topics covered in GVC literature, aiming to give readers a comprehensive overview of the relevant material to enhance their understanding of GVC research. It has three sections: the first section explains key concepts, describes the characteristics of GVCs, and briefly discusses the factors behind recent GVC developments. The second section summarizes major GVC analytical approaches commonly used in the business and economics literature. The final section highlights the economic impact of GVCs in four important areas: competitiveness, economic development, labor markets, and trade costs.
Author(s)
John VerWey
This is the first of two papers that analyze China’s semiconductor industrial policies and factors that will dictate their success or failure. China’s attempts since 2014 to support and grow its domestic semiconductor industry have drawn considerable international attention. The purpose of this series is to place into context the various attempts by the Chinese government to support its domestic semiconductor industry, dating back to the 1950s. Part one presents a history of China’s past efforts at semiconductor industrial planning, describes the current plans, and discusses their execution to date. Part two explains why previous plans have failed, how lessons learned from past failures have been incorporated into current plans, and examines their prospects for success, finding that China’s current strategy will likely not achieve its aims.
Author(s)
John VerWey
This paper, the second in a two-part series analyzing the Chinese semiconductor industry, attempts to answer two questions: First, why—in spite of 70 years of industrial planning efforts—can’t China make advanced semiconductors on par with the worldwide industry leaders? Second, what are China’s prospects for success with its current semiconductor industrial plans? This paper reviews the development of the semiconductor industries in Taiwan, Japan, and South Korea in the context of literature on latecomer strategies and compares their development with China’s efforts. The paper also considers China’s prospects for success. China’s current plans are well defined, with national champions focusing their efforts on targeted subsectors of the industry, but these efforts will not achieve their desired success due to a lack of human capital and intense international competition.
Author(s)
Sarah Oliver
Using data on service occupations in U.S. manufacturing sectors in 2016, this paper seeks to highlight the value of in-house services in U.S. manufacturing output, by assessing the relationship between the share of services occupations in a particular sector (services occupation intensity) and typical education and compensation in service occupations. Overall, this paper finds a positive and significant relationship between services intensity and the typical education level of service workers within sectors, and a positive and significant relationship between service intensity and the average compensation of service occupations across sectors. For U.S. manufacturing sectors, these in-house services represented between $8.7 and $17.5 billion in additional services value added in 2016 compared to $56.8 billion for intermediate services inputs in the same year.
Author(s)
Samuel M. Goodman
Photovoltaic energy production has increased dramatically over the past decade as manufacturing costs have decreased, power conversion efficiencies have increased, and demand for carbon neutral electricity has grown. Silicon-based solar cells represent the largest market share within the photovoltaic industry, with the remainder substantially composed of the thin-film materials cadmium telluride (CdTe) and copper indium gallium diselenide (CIGS). The materials used in CdTe and CIGS are less common and their available supply is mediated by a long value chain. This article examines those value chains, including mining, refining, and solar cell manufacturing to discuss potential bottlenecks for future production. While there is enough of these elements to meet current and near-term demand, the production of CdTe and CIGS solar cells will be fundamentally constrained due to limitations when recovering raw materials from parent ores.
Author(s)
Lin Jones, Christine Kobza, Finian Lowery, Caroline Peters
The evolution of re-exporting hubs, entrepôts, is explored in this paper by looking at trade patterns of merchandise re-exports over the last 20 years through three key economies (Hong Kong, Singapore, and the United States), and their inter- and intra-regional linkages. The growth of re-exports of intermediate goods during this period suggests that these economies are playing an increasingly important role in global value chains (GVCs) by acting as hubs in regional supply chains. Findings also indicate that high volumes of intermediate goods that are re-exported appear in sectors in which GVCs have a strong presence, as in the case of semiconductors.
Author(s)
Huang Xianhai, Yang Gaoju, Lu Jing
Using the opto-mechatronics industry cluster of Pinghu, China, as a case study, this paper analyzes the international specialization status of China’s advanced-technology industry. Our research indicates that Pinghu’s industry cluster follows an exogenous industry cluster development model, which is typical of China’s advanced technology industries. In this model, government-guided foreign investment comes to a region first and generates learning spillovers for local enterprises, enabling the government to create a public platform for technology innovation. Foreign-owned and local private companies then work together to promote the further development of industry clusters. True to this model, the initial driving force behind the opto-mechatronics industry was the Chinese government, with foreign investment as its engine; then followed the public technology platform and supporting industries. Our study, based on interviews with industry personnel, also indicates that the performance of Pinghu’s opto-mechatronics industry exceeds the national average and that Pinghu is becoming more like an endogenous cluster over time—more market-oriented and increasingly reliant on domestic factors. However, its average value-added ratio was relatively low; imported intermediate inputs still constitute a large share of the value of manufactured output. Thus, although Pinghu’s opto-mechatronics industry enjoys a leading position in China, it remains largely concentrated on processing and assembly, which is at the low-skill-intensive end of the production chain.