Estimating the environmental and employment impacts of China's value-added trade from the perspective of value chain routes.

Abstract

This study aims to evaluate the environmental and employment impacts of China's value-added trade using the gross exports decomposition method and balance of avoided factor content. The major findings are that China's value-added trade overall leads to increases in global emissions and employment, which are mainly affected by the characteristics of China's exports. However, China's imports indirectly promote global emissions reductions and have a significant driving effect on foreign employment. Trade through onefold value chains plays a dominant role in determining both impacts. Simple global value chain (GVC)-related trade contributes most to reducing global emissions but decreases global employment as well. Complex GVC-related trade overall increases global employment and emissions. At the bilateral level, the impacts are varied, and there are some instances of complex GVC-related bilateral trade that contribute to global emission mitigation. A win-win situation for the environment and employment can be achieved in China's bilateral trade with some countries through specific value chain routes. These findings can provide useful information for balancing trade growth, carbon emission reduction, and job creation and may indicate the future direction of China's upgrade in the GVCs and help allocate emission reduction responsibilities.