Global Value Chain and the Competitiveness of Asian Countries

This paper examines the competitiveness of industries in six Asian countries—China, India, Indonesia, Japan, South Korea, and Taiwan—using the World Input-Output Database tables from 1995 to 2011. Competitiveness is measured by the value added that industries contribute to the production of final goods, which we refer to as global value chain (GVC) income, rather than by gross exports. We find that the competitiveness of manufacturing is increasing in China, India, and Indonesia, whereas it is decreasing in Japan, South Korea, and Taiwan. Even though we focus on the GVC income rather than gross exports, the increasing competitiveness of Chinese, Indian, and Indonesian manufacturing is remarkable. We also find that, unlike EU countries, Asian countries have generally been able to combine increasing GVC job opportunities with a rise in real income. The GVC income in Asian countries presents a different picture to that in European countries.