Study on the Influence of Global Value Chain Division on the Export Trade between China and Europe: Based on the Analysis of Exchange Rate Transfer Effect

Jia Fang

doi:10.6981/FEM.202503_6(3).0011

Authors

Jia Fang

DOI:

https://doi.org/10.6981/FEM.202503_6(3).0011

Keywords:

Exchange Rate Transfer Effect; Global Value Chain; China-European Export Trade.

Abstract

Since the exchange rate reform in 2005, the RMB exchange rate has fluctuated greatly, triggering the discussion on its possible trade impact. In this context, the correlation between import and export prices and exchange rate has become a hot spot in the field of international finance. This paper focuses on the effect of exchange rate transmission in the context of global value chain (GVC), and analyzes how exchange rate fluctuations affect the export commodity prices in different industries. The development of the global value chain has reshaped the traditional international trade model. The production links of products are scattered in different countries and regions around the world, and the position and participation degree of different countries in the global value chain are significantly different. Therefore, the issue of exchange rate transmission has become an important topic in the field of international trade and financial research. In this study, the export trade data of 10 European countries, including China and Belgium, the Czech Republic, Germany, Spain, France, Great Britain, the Netherlands, Italy, Poland and Portugal from 2012 to 2021, were selected as the study sample. Referring to the classification standard of WIOS, the industry classification matching was carried out and studied from the perspective of 15 industries in C01-C15, namely trade in goods. A panel data model containing three dimensions of country, year and industry was constructed for analysis. This study draws on the method of Koopman (2010), constructs the global value added, and includes it in the FGLS model for empirical analysis and testing, and draws the conclusion that the higher the participation in the global value chain, the weaker the exchange rate transmission.

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