Title: Impact of the COVID-19 pandemic on global value chain and implications for the Belt and Road Initiative
Authors: Inkyo Cheong; Jeong Ho Yoo; Kyoungseo Hong; Paul Tae-Woo Lee
Addresses: Department of International Trade, INHA University, South Korea ' Department of International Trade, Pukyong National University, South Korea ' Department of Political Science, Graduate School, New York University, USA ' Ocean College, Zhejiang University, China
Abstract: China's Belt and Road Initiative (BRI) has the merit of contributing to regional economic development in tandem with infrastructure investment along economic and transport corridors. However, the issue of its sustainability has been raised due to enormous capital requirements and low profitability. Moreover, the outbreak of the COVID-19 has caused incomparable economic damage and supply chain disruptions worldwide in the form of entry bans, quarantines, trade blockades, and global protectionism, which are barriers to international trade and work against the development of the global value chain (GVC). This paper aims to quantitatively estimate the impact of COVID-19 on GVC adjustment by region and industry and derives policy implications based on the decomposition of value added (VA) and vertical specialisation (VS) trade. It is estimated that the GVC will shrink by 4.8%-20.2% in terms of VS trade depending on various scenarios.
Keywords: COVID-19; Belt and Road Initiative; BRI; global value chain; GVC; adjustment; quarantine and blockade; resilience; vertical specialisation trade.
International Journal of Shipping and Transport Logistics, 2022 Vol.14 No.4, pp.371 - 394
Received: 13 Nov 2020
Accepted: 31 Jan 2021
Published online: 01 Jul 2022 *