Global Value Chains in the Post-pandemic Era

Abstract

AbstractGlobal value chains (GVCs) are a huge network connecting the world as a whole in different stages of the production process. GVCs are significant in terms of creating jobs, improving the production efficiency of enterprises, and promoting overall national and global economic growth. As different links in value chains are located across countries and regions, global economic ties have been strengthened. But many problems of GVCs appeared even before the outbreak of COVID-19. Marginalized countries are less involved in GVCs, leading to an imbalance in the distribution of economic benefits. High technology is replacing and cutting down the demand for human labor, and trade protectionism hinders the further development of GVCs. After the pandemic, industries in the GVCs are also hit severely, especially on the production side. Considering technological, political, and security factors, more countries tend to locate their production in regions close to their borders or final consumption markets, forming a more fragmented production layout. At the same time, de-globalization sentiment is growing and developing countries, influenced by the digital economy, are under bigger pressure to catch up with developed countries. The sustainable development of GVCs in the post-pandemic era calls for the reconstruction and innovation of international economic and trade rules. More open and fair international rules will contribute to an effective, transparent, and inclusive international rule system.