Can the development of industrial intelligence increase the overall benefits of China’s participation in global value chains?

Abstract

The rapid expansion of global value chain (GVC)-driven labor division has fueled sustained economic growth in developing countries, but it has also placed considerable strain on their resources and environments. Traditional GVC accounting methods have not accounted for environmental costs. Using China as an example, drawing on panel data from Chinese industries between 2000 and 2020, this study analyzes the effect of industrial intelligence on China’s participation in the GVC from three key perspectives: comprehensive benefits, economic gains, and environmental costs. The study finds that the advancement of industrial intelligence enhances China's participation in the GVC, resulting in improved comprehensive and economic benefits. Moreover, improving production efficiency and promoting technological progress are key mechanisms by which industrial intelligence enhances comprehensive benefits. An analysis of environmental costs reveals that the development of industrial intelligence also helps reduce these costs. This paper argues that China should further refine its socialist market economy system and strategically adjust key industries while effectively integrating into the GVC. Harmonizing the relationships between trade, economic development, and resource and environmental management is crucial.