Achieving Inclusive Growth in China Through Vertical Specialization

Vertical Specialization and Inclusive Growth in China discusses the two interrelated developments that have transformed the Chinese economy in recent years. First, the global community has increased calls to foster inclusive economic growth, with China embracing this trend. Second, the explosive growth in China?s trade resulting from international vertical specialization production and trade networks which has complicated the notion of inclusive growth in the Chinese context.

This book assesses these two trends quantitatively, giving evidence of the link between vertical specialization and inclusive growth, and then decomposing the inclusive growth effects of vertically specialized trade into six components: GDP growth, export growth, FDI, environment, employment, and innovation. It further explores the differing impact of conventional trade and processing trade on inclusive growth, providing direction for future policy. This second book by the author to consider vertical specialization stresses the importance of integration in driving inclusive growth.

1. Introduction and Overview

2. Structural Change and the Evolving Pattern of China’s Free Trade in a Vertically Specialized Perspective

3. Vertical Specialization and Expanding Exports during the Transition to Inclusive Growth in China: Comparing Impacts of Conventional Imports and Processing Imports on Exports

4. Vertical Specialization and Changing Engines of Economic Growth during the Transition in China: Comparing Impacts of Conventional Trade and Processing Trade Pattern on GDP Growth

5. Vertical Specialization and Rising Employment during the Transition to Inclusive Growth in China: Comparing Impacts of Conventional Trade and Processing Trade Pattern on Labor Market

6. Vertical Specialization and Increasing Income during the Transition to Inclusive Growth in China: Comparing Impacts of Conventional Trade and Processing Trade Pattern on Wage

7. Vertical Specialization and Lowering Environmental Damage during the Transition to Inclusive Growth in China: Comparing Impacts of Conventional Trade and Processing Trade Pattern on Energy Consumption

8. Vertical Specialization and Strengthening Indigenous Innovation during the Transition to Inclusive Growth in China: Comparing Impacts of Conventional Trade and Processing Trade Pattern on Innovation

9. Vertical Specialization and Upgrading Utilization of Foreign Capital during the Transition to Inclusive Growth in China: Comparing Impacts of Conventional Trade and Processing Trade Pattern on Foreign Investment

10. Concluding Remarks

• Argues that inclusive growth and vertical specialization analyses must be performed together
• Gives quantitative evidence for the link between vertical specialization and inclusive growth in China
• Investigates the different impact of conventional trade and processing trade on transition to inclusive growth in China, using comparative analysis techniques
• Offers insight on forming future policy in China to increase inclusive growth