Focus on global trade

Global value chain and supply chain discussions highlighted the APEC Ministers Responsible for Trade Meeting in Qingdao, east China's Shandong Province, on May 17-18.

The meeting passed two important proposals: the APEC Strategic Blueprint for Promoting Global Value Chains Development and Cooperation, and the Strategic Framework on Measurement of APEC TiVA Under Global Value Chains.

Today, economic globalization has entered into an era of global value chains, trade and investment between APEC economies, and production networks in the Asia-Pacific region have become an important part of the global value chains, said spokesman Shen Danyang in an interview with Chinese media outlets.

The scope of trade has been not limited to goods, as service is accounting for an increasing proportion in trade of many developed economies. Moreover, trade has been more and more complicated to calculate because many economies are likely to be involved in a product from its design to production and sale, according to Shen Danyang.

He took the iPhone as an example to showcase the complexity of trade: The operating system is designed in the United States, its chip is produced in Japan, some components are produced in South Korea, and it is assembled in China and exported to the rest of the world.

"In the past, the large trade surplus came with large income. But it is less so today. The global value chain includes trade, service and investment. The measurement is helpful for economies to know its position in the global value chain," he said.

China has long been called the world's factory, and the large scale of trade often makes China a target for trade disputes. Shen Danyang pointed out, with measurements of the global value chain, it will be easy to find that China's trade surplus in fact does not really belong to it.

In addition, supply chain management is a new task for APEC in recent years. The production and trade chain between Asia-Pacific economies has reached a high level of integration. If the supply chain cannot be improved, it will bottleneck regional economic development, Wang from the CIIS said.

With the two framework agreements, APEC hopes to establish a cooperation mechanism on global value chains and promote it to the rest of the world, Wang said.