Upstream Dependence of China's High-End Manufacturing Sector on the International Market

• Published in: CHINESE ECONOMY
• Main Authors: Shang, Lijing; Aman, Saiful; Rahmat, Abdulkhabir
• Format: Article; Early Access
• Language: English
• Published: ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD 2024
• Subjects: Business & Economics
• Online Access: https://www-webofscience-com.uitm.idm.oclc.org/wos/woscc/full-record/WOS:001293484500001

Supply chain globalization is a distinctive feature of the manufacturing sector. However, the market environment is becoming more complex, and the vulnerability of the global supply chain is becoming more and more prominent. Assessing external dependence based on the intermediate products can more accurately identify the threats inherent in China's manufacturing supply chain. This article aims to measure and verify the upstream dependence on the international market in China's high-end manufacturing industry. UD is adopted to evaluate the degree of upstream dependence; CR8 is applied to measure the concentration of upstream intermediate products' dependence on the eight largest economies. The results show that the upstream dependence of China's high-end manufacturing sector on the international market increased from 0.08089 in 2017 to 0.11354 in 2022, growing by 40.36%. The upstream reliance on Asia and Europe is greater while displaying a lesser reliance on North America, Oceania, South America, and Africa. China's high-end manufacturing sector exhibits a significant reliance on some upstream suppliers, including the Republic of Korea, Australia, Japan, Germany, the United States, and Russia. The concentration of the upstream dependence on the eight largest economies in the international market has increased from 0.03192 in 2017 to 0.04522 in 2022, but the share of the largest four economies decreased from 75.24% in 2017 to 65.29% in 2022. There are great gaps in the upstream dependence of the seven high-end manufacturing sectors.