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The path of regional value chain transformation and emission reduction: evidence from China's participation in
Abstract:
The shift in value chain trade from globalization to regionalization has provided developing countries with opportunities for value chain upgrading and has influenced trade-related embodied carbon emissions. This study uses panel data on trade and carbon emissions between China and 21 Asia-Pacific Economic Cooperation (APEC) economies from 1991 to 2021, applying a fixed-effects model to analyze changes in embodied carbon emissions. The focus is on China, the largest developing country, as it participates in the APEC regional value chain (RVC) in different ways. It is confirmed that China is leveraging RVCs to achieve industrial transformation from the perspective of value added. Subsequently, indicators for forward and backward participation in RVCs are constructed, recalculating their impacts on carbon emissions in terms of scale, structure, and technology. The results indicate that China's forward participation exhibits a "U-shaped" relationship with trade-related embodied carbon emissions, while backward participation demonstrates a negative correlation. Industrial heterogeneity analysis further highlights distinct impacts across high-tech, low-tech, pollution-intensive, and nonpollution-intensive sectors. Furthermore, scale effects, structural effects, and technological effects represent distinct pathways influencing trade-related carbon emissions. These findings can assist developing countries in advancing sustainable development and achieving carbon peak goals.
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