Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

China's role in GVCs

No description
by

Lena Cyr-Haschigk

on 28 November 2013

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of China's role in GVCs

Conclusion
China’s role in GVCs

Context
Introduction
Lena Cyr-Haschigk
Stéphanie Aoun
Thierry Gras
Xavier Ducharme


Litterature review
Context
Analysis
Conclusion

FDI & rising wages
Flying
Geese
Paradigm
Rising
wages & productivity
Litterature review
I wonder what's the impact of China’s rising wages on the country's role in GVCs & on the multinationals strategies?

Other factors

Other factors

Impact on enterprises strategies
Worker's productivity
Other factors

$
$
$
Comparative advantages
Government's actions
Low wages
Priority sectors
R&D
Education


Low
wages
Skills
R&D
Innovation
... in China's comparative advantage
Gradual shift...
Foreign direct investments, net inflows (BoP, current USD, 1990 to 2012)

Volume
Impact on enterprises strategies
FDI
Volume
Exports
Impact on enterprises strategies
Analysis
Exports
Nature
China's exports (2001)
85 - Electrical, electronic equipment
84 - Machinery, nuclear reactors, boilers, etc.
61 - Articles of apparel, accessories
90 - Optical, photo, technical, medical, etc.
62 - Articles of apparel, accessories, not knit or crochet
64 - Footwear, gaiters and the like, parts thereof
89 - Ships, boats and other floating structures

85 - Electrical, electronic equipment
84 - Machinery, nuclear reachers, boilers, etc.
61 - Articles of apparel, accessories
90 - Optical, photo, technical, medical, etc.
62 - Articles of apparel, accessories, not knit or crochet
64 - Footwear, gaiters and the like, parts thereof
89 - Ships, boats and other floating structures

Impact on enterprises' strategies
Relocation & reshoring
Main reason:
labor costs
In fact:
less than 100 US firms reshored their activities
Why?
High costs of reshoring



Quality
Location
Infrastructure
Buying power
Impact on enterprises' strategies
Internal relocation
Low wages &
incentives
Impact on enterprises' strategies
Higher cost of transportation
Distance/time
Transportation network
Rules of transportation
Lower quality of workers & suppliers

Market access
Internal relocation
Impact on enterprises' strategies
Chinese firms
Productivity
Capabilities
Investments
in
R&D
Xiè xiè!
The entry of China in GVCs
Lewis
turning point

1980: Reforms & Processing trade regime
Advantages: low wages + abundant human capital

2010: processing imports: 45% & processing exports: 55%
2012: 1/5 of global production
Driving forces of wage growth
$
$
$
$
$
$
$
$
$
Wage inflation
$
$
$
Type of enterprise
Type of industry
Chinese's manufacturing wages are still well below those found in developed countries.
In the coming years, wages will continue increase.



Wage inflation
Government policies in favor of workers rights


Aging population & increasing education levels among young workers


Shortage of skilled workers in eastern China
Region
Country
 
Dennis Tao Yang, Vivian Weijia Chen et Ryan Monarch. Rising wages: has China lost its global labor advantage? Pacific Economic Review, 2010, p. 497.


China Briefing. A complete guide to China’s minimum wage levels by provice, city and district. Le 28 janvier 2013.


Dennis Tao Yang, Vivian Weijia Chen et Ryan Monarch. Rising wages: has China lost its global labor advantage? Pacific Economic Review, 2010, p. 492.

 
Dennis Tao Yang, Vivian Weijia Chen et Ryan Monarch. Rising wages: has China lost its global labor advantage? Pacific Economic Review, 2010, p. 489.


Dennis Tao Yang, Vivian Weijia Chen et Ryan Monarch. Rising wages: has China lost its global labor advantage? Pacific Economic Review, 2010, p. 487.


1,349,585,838
people!
Hey, here's another option, stay in China! We have good and reliable suppliers, plenty of productive and highly skilled workers, plus, you will gain access to the booming Chinese market!
Main reason:
labor costs
In fact:
mostly textile enterprises in early 2000
Why?
highly labor-sensitive



Reshoring
Relocating
37% of US firms with 1B$+ revenues
48% of US firms with 10B$+ revenues

Questions:

Could China take another path in the future?

What could the government do to further attract MNEs and keep an important role in GVCs?

85 - Electrical, electronic equipment
84 - Machinery, nuclear reactors, boilers, etc.
61 - Articles of apparel, accessories
90 - Optical, photo, technical, medical, etc.
62 - Articles of apparel, accessories, not knit or crochet
64 - Footwear, gaiters and the like, parts thereof
89 - Ships, boats and other floating structures

China's exports (2012)
Full transcript