(Correspondent: Li Yue) Recently, the paper completed by Prof. Ge Shunqi was published in the top Chinese economics journal--The Journal of World Economy (2021-08), coauthored by Li Chuanchuan and Wang Yue. The paper is entitled Impact of FDI Outflows on China’s Value Chain Linkages: A Study Based on Different Sources of FDI.

Drawing on the annual reports of foreign-funded firms, this paper calculates the rate of FDI outflows from China between 2014 and 2017, and examines the impact of FDI outflows on bilateral value chain linkages between China and different sources of FDI. The study reveals that FDI outflow behavior generally reduces China’s overall value chain linkages. For every 1% increase in the outflow rate, the degree of value chain linkages decreases by 0.007% on average. Research on spillover effects indicates that FDI outflow behavior mainly and negatively affects the value chain linkages of downstream domestic firms, and has an insignificant impact on the value chain linkages between upstream and downstream foreign-funded firms and upstream domestic firms. Additional study concludes that outflows from regions such as the United States and Japan significantly reduce value chain linkages, while outflows from South Korea significantly promote these linkages. FDI outflows from high asset-specific industries show an even greater negative effect on linkages.  

The Journal of World Economy is an academic journal jointly sponsored by the Chinese Academy of Social Sciences, China World Economics Association and the Institute of World Economics and Politics. It was founded in 1978 and is one of the earliest world economic publications in China.