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China has been central to the story of global value chains (GVCs). Starting out as the world’s final assembler and exporter, China is now on the road to becoming a major consumer market. With expanding domestic consumption, companies operating on the mainland are increasingly using local goods and services to deliver their products. In other words, China’s GVCs are changing yet understanding of these production networks is still in its infancy. Against this backdrop, FGI and Fung Business Intelligence Unit commissioned a group of Chinese scholars, led by Professor Song Hua of Renmin University, to explore the emergence of China’s GVCs, the environment and policies that have shaped them, and the challenges they have had to contend with.
Chapter 1 gives an overview of Chinese research on GVCs. It discusses the forces driving the internationalization of production, various concepts and issues associated with the management of GVCs, and strategies both for attracting and securing fuller Chinese participation in GVCs.
Chapter 2 looks at the role of logistics in fostering outsourcing, as well as the core competencies required for third-party logistics suppliers. The chapter also discusses the functioning of fourth-party logistics suppliers who provide comprehensive supply chain solutions.
Chapter 3 examines the growing pressures and opportunities for incorporating environmental costs into GVC operations. It discusses the strategies and technologies involved, as well as methodologies for performance evaluation and an integrated framework for research on ‘green’ supply chains.
Chapter 4 addresses risk management and tries to systematize thinking about alternative sources of risk, assessing impacts, distinguishing between internal and external sources of risk, and considering possible risk-diminishing options.
Chapter 5 is dedicated to issues surrounding the nature and role of small and medium-sized enterprises (SMEs), as well as the relevance of industry clusters to SME participation in GVCs. Industry clusters open up additional possibilities for SME involvement. Considerable emphasis is placed on the difficulties and challenges encountered by SMEs in linking into supply chains.
Chapter 6 is devoted to the important and sometimes under-estimated role of services on supply chains. This is a wide-ranging discussion covering many ways in which services are relevant to GVCs. A number of sectors are specifically discussed in order to illustrate the importance of the role of integrated service providers.
Chapter 7 examines the reasons why flexibility matters in the face of uncertainty and fast-changing conditions in markets and other situations facing GVCs. Much of the literature seeks to distinguish among different circumstances in which flexibility is important, and what the ingredients of success are in ensuring flexibility.
Chapter 8 is devoted to trade finance, linking finance issues to the broad spectrum of firm activities, the types of finance required, the links between risk and the availability of finance, and the challenges for enterprises in securing the requisite finance.
Chapter 9 examines measurement and modelling issues relating to the costing of logistics and the evaluation of supply chain performance.