Landscape of global agrofood GVCs: the place of China

Transcription

1 Landscape of global agrofood GVCs: the place of China OECD-ATPC-ICTSD Workshop Agro-Food Global Value Chains and Farm Policy: The place of China Dr Jared Greenville, Senior Agriculture Policy Analyst, OECD

2 2 GVCs what are they? Value chains: describe a production process for a final good Full range of activities from concept to final good Represent all the links between industries Global value chains focus on the international linkages relate to trade But there are also significant domestic linkages And products are often delivered to final demand So need to also look further Interest to explore issues related to domestic value added

3 3 How do we measure GVCs? Measured from country-industry perspective We look first at the links for an industry in a given country Look at the breakdown of value added in exports Need to ask certain questions Where do the inputs used in production come from? Where do the exports go? After they are delivered to another country, what happens next? Need to know flows of trade in value added, not gross flows Computed from Inter-Country Input-Output tables

4 4 How do we measure GVCs? Concept of backward and forward linkages Backward linkages: buying from GVCs Measures the amount of foreign value added embodied in exports Comes through intermediate input usage Forward linkages: selling into GVCs Measures the amount of domestic value added that forms part of another country s exports So picks up the ongoing value chain Domestic value exported can be either direct (own exports) or indirect (exports from other domestic industries that make use of the outputs produced, eg processing sector exports using agricultural production as inputs)

5 Column shows source of foreign value added in own exports: Buying from GVCs 5 What does the agro-food GVC landscape look like? China Japan ASEAN Canada USA India EU28 Sth America Africa China Japan ASEAN Canada USA India EU Sth America Africa Agro-food GVC hubs: EU, China followed by ASEAN, USA Row shows how exported value added is used in other country exports: Selling to GVCs

6 6 Who uses China s agro-food exports as inputs into their own exports? ASEAN and EU important linkages China Japan ASEAN Canada USA India EU28 South AmericAfrica China Japan ASEAN Canada USA India EU South Americ Africa For EU, GVCs are internal to the common market

7 7 Where does China source from for its own exports? China Japan ASEAN Canada USA India EU28 South AmericAfrica China Japan ASEAN Canada USA India EU South Americ Africa China sources globally, with key links to USA, Sth America and ASEAN

8 8 How does China s buying from GVCs compare with the rest of the world? Foreign value share (from all sectors) in gross export value China EU28 ASEAN USA World Backward linkages low for China s main exports Large domestic market Policy settings 0 Other food products Vegetables, fruit, nuts Other crops Pork & poultry Meat (Pork&Poultry) Beverages and tobacco products Oilseeds Vegetable oils & fats Wool & raw silk

9 9 How does China s selling to GVCs compare with the rest of the world? Domestic value added in other countries exports as share of direct export value China EU28 ASEAN USA World 7 For forward linkages much higher: Exports intermedia tes High amounts of indirect exports Other food products Vegetables, fruit, nuts Other crops Pork & poultry Meat (Pork&Poultry) Beverages and tobacco products Oilseeds Vegetable oils & fats Wool & raw silk

10 10 Getting the most from GVCs: understanding domestic value added Getting the most out of GVCs Participation indicators show where a country fits within GVCs But they do not tell us about the benefits from being involved Instead, domestic value added generated is important Domestic value added represents the return from being involved It represents the returns to labour and capital, along with taxes paid to governments (but less subsidies) It picks up the benefits to the entire economy from the activity Both within the sector and to all who contribute

11 11 Where is value added created in agro-food in China: final $1 Services Industry Food Agriculture 100% 90% 80% 70% 60% 50% High share of agriculture compared with world, developed countries and Brazil 40% 30% 20% 10% 0% Less processing in food consumption compared with some China USA Japan EU Brazil World

12 Agriculture Food 12 Where does DVA come from: exports Share of DVA in exports by source Agriculture Food Industry Services Paddy rice Wheat Other grains Vegetables, fruit &nuts Oilseeds Sugarcane & beet Plant-based fibers Other crops Livestock Other animal products Raw milk Wool & silk Forestry Fisheries Bovine meat Other meat Vegetable oils & fats Dairy Processed rice Sugar Other food Beverages & tobacco Higher DVA share for each $1 of ag exported Agriculture important for food

13 13 Lower services inputs in agro-food exports in China compared with the rest of the world China EU USA Average World For service inputs, compared with the USA much lower % Agro-food Industry Services

14 14 Recap on some key messages GVCs in China China significant player in agro-food GVCs: more so that many other major traders Large forward linkages, low backward high share of intermediates trade Agriculture exports also deliver high domestic value added returns Need to understand drivers to total DVA creation as targeting shares can be misleading Service inputs indicate gaps China s agro-food sectors use less service inputs compared with others potential to reform outside agriculture

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