By @SimonCocking review of China and Global Value Chains, Globalization and the Information and Communications Technology Sector, 1st Edition. Available here. By Yutao Sun, Seamus Grimes, Routledge, 180 pages
President Trump has raised the intriguing question of bringing the manufacturing of companies like Apple back from China to the U.S. This book, however, argues that in this age of the knowledge-based economy and increased globalization, that value creation and distribution based on knowledge and innovation activities are at the core of economic development. The double-edged sword of globalization has transformed China’s economic development in the past few decades. Although China has benefitted from globalization and is now the second largest economy in the world, having become a global manufacturing power and the biggest exporter of high-tech products, it continues to be highly dependent on foreign sources of capital and technology.
This book will explore the core of the Chinese economy from the perspective of the Global Value Chain (GVC), combining analysis of inward investment, international trade, Science and Technology and Innovation (S&TI) and economic development. Specifically, it investigates China’s evolving role in GVCs with some innovative Chinese companies emerging in the global market and China’s ongoing efforts to become an innovation-driven economy. China’s impressive economic record and experience provides an impressive role model for other developing countries.
This is a timely book, and poses the super interesting question, that many of us have been wondering about. Can Trump really pull the USA out of its globalised trade patterns and partnerships. Surely the world economy is now too globalised, and too integrated, for something as simplistic as withdrawing from global and regional trade agreements? Can this possibly ‘make America great again’? Or this just the chest beating slogans of a populist leader, appealing to a disenfranchised and angry electorate?
For these reasons this was a book that we were interested to read, to see if it could get to the heart of these issues, and provide some meaningful insights, analyse, and even, potentially, predictions of where it all might go in the future. The book quickly demonstrates that trade, internal, national, and global is a lot more complex and interrelated, and can not be simply reduced to made in China / made in the US designations. Grimes and Sun make the point well that China is the coming nation, but it has reached its economic growth via a very different route to that followed by its geographical neighbour, and economic boom predecessor, Japan. This time around, Chinese growth has been achieved via a close and interwoven relationship with Foxcon, a Taiwanese based company, Apple, and many, many other multinational entities. The Chinese are accutely aware of the need to transition from ‘made in China’ to ‘created in China’ and have already been making large strides in this direction.
A recent article in the Irish Times also referred to the fact that Trump’s tariffs appear to have, initially resulted in an increase in trade from China coming into the US. Suggesting that everything is surely a whole lot more subtle and complex than anyone might have imagined. This book carefully, and delicately explains the underlying trends. Overall it looks foolish to bet against China establishing clear water between themselves and the rest of the world in terms of becoming the world’s largest economy. In this context Trump’s tariffs seem potentially like the last desperate, vote pleasing, actions of a country whose place in the world is being readjusted. One thing about this book though is that this is only something that you might get from reading between the lines, rather than anything explicit in the text mentioning this. By the end you found yourself yearning for a little less data and a little more analysis, especially for the conclusion. Still we live in fast moving times, so perhaps the data will bear this out sooner or later anyway?
Here is a podcast of an interview on the book.