How Have Global Value Chains Transformed the Economies of China and Taiwan? A Theoretic Analysis of the Win-win Outcome

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• 研討會日期 : 2011-08-12
• 時間 : 14:30
• 主講人 : Professor Henry Y. Wan, Jr.
• 地點 : Conference Room B110
• 演講者簡介 : Henry Y. Wan, Jr. got his Ph.D. in Economics from Massachusetts Institute of Technology in 1961. He is currently serving as Professor of Department of Economics at Cornell University. His research field is in development under globalization, the economics of East Asia, industrial policy, and welfare economics of international trade.
• 演講摘要 : Technological advance gives rise to the global value chains (Lamy and Shiraishi, WTO, 2011). In the course of this development, the world economy has reached a critical phase, with fabrication massively outsourced by the developed economies (Van Liemt, ILO, 2007). China becomes the World’s Workplace; experienced firms in Taiwan serve as the catalysts. Together they excelled in world supply networks (Sturgeon and Lee, 2005; Ancelovici and McCaffrey, 2005). Two concepts play central role in this development. · The scaling-up process This allows the launching of new vintages of product in high skill economies by small batches, and then the using of the hands-on experience to plan for volume production in economies of low wage (Grove, 2010). Such sequenced decision allows the high skilled labor to earn remunerative income and permits the low wage economies to join the global supply network. · The contract manufacturing operation In such a context, the processes of modularization and coding take place in production. A limited set of building blocks can be designed, then produced and used to meet wide varieties of potential demand from worldwide customers (Steinfeld, 2010). The design work is participated by firms in developing economies with fabrication experience, based on their collections of past models and records. Unlike simple subcontractors, these firms become contract manufacturers and earn profit margins to fund R. and D. efforts for further upgrading. Contract manufacturing did not originate in East Asia. But past subcontracting experience and the cultural-ethnic link to China (with its immense labor supply) have allowed Taiwanese firms to capture the leadership role from their North American rivals in this industry. This development also lands China the opportunity to industrialize ahead of its peers, like Mexico. An integrated, parsimonious model is constructed to show the primal role played in this transformation by the continuous rapid technological advances in the present era. The implications to trade and development are then explored.