On February 28, 2024, the Macro-Finance Salon (No. 223), co-organized by the School of Finance and the National Finance Academy of Renmin University of China (RUC) and hosted by the International Monetary Institute (IMI) of RUC, was successfully held through an online live conference, centered on the theme “Global Value Chain Restructuring”. Economist Qiu Han from the Asia-Pacific Representative Office of the Bank for International Settlements (BIS) delivered a keynote speech. Distinguished guests who also participated in the discussion included Cao Tong, Co-Chairman of IMI and Chairman of Shanghai Huarui Bank (SHRB); Cheng Shi, Chief Economist of ICBC International; Liao Shuping, Senior Research Fellow at the Bank of China Research Institute; and Zhang Monan, Deputy Director and Research Fellow of the America-Europe Research Department at the China Center for International Economic Exchanges. The session was hosted by Wang Fang, Associate Dean of the School of Finance of Renmin University of China and Vice Director of the International Monetary Institute.

Qiu Han first delivered the keynote speech. He pointed out that discussions on industrial chain under the current situation are increasing and that some macroeconomic data reflects a possible restructuring of the global industrial chain. He also stressed the importance for central banks and policymakers to grasp these changes. In this connection, Qiu specifically highlighted two challenges faced when analyzing macro data: the relatively slow update frequency of industrial chain macro data and the limitation of macro data in explaining the underlying reasons for industry changes.

A study by the Bank for International Settlements (BIS) constructed a network of global value chains or industrial chains from a micro-trade perspective and tracked the changes within the value chain. Findings are as follows. Firstly, constructing a company-level industrial chain network enables more comprehensive and timely monitoring of chain dynamics. Secondly, analysis based on company-level data reveals that the supply chain remains highly globalized. Thirdly, the supply chain is becoming longer, with an increasing number of intermediaries. Lastly, the elongation of supply chain is particularly evident in the supply relationships between Chinese and American enterprises, with Asian companies increasingly becoming intermediaries for Chinese and American enterprises. The recent adjustments in the industrial chain have not affected the integration process in Asia.

Following that, conference attendees engaged in in-depth discussions surrounding the restructuring of the global value chain.

Cao Tong delved into the underlying motivations and patterns behind the global industrial chain restructuring. He began by examining the industry chain networks at the enterprise level and came to three conclusions. First, the trend towards internationalization remains unchanged. Second, the trend towards regionalization, particularly in Asia, is still strengthening. Third, there is an elongation of intermediary chains from both the buyer's and seller's perspectives. Regarding the restructuring of the industrial chain, he raised several questions: Has the restructuring and relocation of the industrial chain already occurred at present? At what stage of development is it currently? What factors should be adjusted for restructuring if the current situation needs to be reversed? Against the backdrop of a reshuffling of the international division of labor, China carries forward the previous round of industrial chain restructuring. In the future, industrial chain restructuring will continue to intensify, particularly in specific industries such as the computer, automobile, energy, national defense, bulk commodities, and medical sectors. However, whether from an academic or policy perspective, special consideration and observation about how to carry out restructuring are required.

Cheng Shi provided a detailed analysis of the changes in the global value chain restructuring from a macro perspective and of China's advantages. He mentioned that based on regional integration, currently globalization is a multilayered globalization involving more complex conflicts and interactions than before. With the distribution and aggregation of products, different countries also develop their own industrial advantages, refining the global value chain. Meanwhile, trade protectionism, populism and isolationism have led to increased costs of globalization, and the energy and manufacturing industries of the world have been reshaped owing to frequent geopolitical conflicts, making it challenging to rebuild global value chains. It’s noteworthy that the impact of pandemic actually accelerated the nearshore transfer of global supply chains which will continue to move upward, and regional value networks form a trend to deepen correspondingly. The activities of global supply chains will be reconfigured incessantly, leading to increasing complexity. He stressed that in the process of carrying forward Opening up, China should not only see challenges, but also its market potentials, digitalization and unique advantages in the Asia-Pacific region. It should learn from advanced experiences and improve high-standard Opening up.

Liao Shuping shared her research and thoughts on China-US trade war. She pointed out that the direct trade between the two countries decreased after the trade war, while the proportion of countries like Mexico, Vietnam and Canada has gone up. In labour-intensive industry, China’s export share has been partially replaced by neighboring Asian countries. In capital-intensive and technology-intensive industries, neighboring countries of the US have become the main replacements. Despite the US attempts to reduce dependence on China through policies such as “friendshoring” and “nearshoring”, in reality, through indirect connection, the US still increasingly relies on supply chain of China, and trade links between the two countries remain close. She emphasized that China needs to be vigilant against stricter restrictions imposed by the United States.

Zhang Monan shared several trends observed in the global industrial chain reorganization and regional development amid China-US competition. Firstly, driven by geopolitical factors, China-US competition and the pandemic, global industrial and supply chains are becoming longer and more decentralized with diversified trade network nodes. The distribution of global industrial chain is increasingly shifting to trading within areas, and China, Germany and America as three major regional nodes are more important in their religions. Secondly, nearshore production is not only happening in America but also prominently in China. Thirdly, regional grouping and trade rule grouping are accelerating, highlighting the consistency of regional trade rules, and some of them are exclusive which further intensifies the regionalization and decentralization of the global industrial chain, value chain and supply chain. Fourthly, high-tech industries emphasize strategic independence in industrial chain restructuring. There is a trend of nationalism in source-intensive industries, while labor-intensive ones lean to diversified and regional production. Fifthly, the uncertainty of China-US decoupling has profound effects on the global industrial chain. What alerts us is that against the backdrop of geopolitical competition and the US seeing China as strategic competitor, two parallel supply chain systems may merge.

Macro-Finance Salon is a high-level academic salon initiated by the International Monetary Institute (IMI) of Renmin University of China (RUC). Rooted in Chinese practice and keeping up with the international frontier, the salon aims to promote the construction of “Macro-Finance” discipline in the new era by conducting in-depth research on “Macro-Finance” theories, policies and strategies, providing a high-level, specialized and open academic exchange platform. Professor Huang Da is the initiator and designer of the “Macro-Finance” ideological system in China since 1949. At the turn of the century, he addressed new challenges and demands posed by economic and financial globalization for the construction of the Chinese financial discipline. He reconstructed a financial discipline framework based on Chinese realities, and initiated and systematically designed the “Macro-Finance” discipline system. Generations of scholars have continued to inherit and carry forward this framework, advocating the combination of finance with real economy and the integration of macro-finance and micro-finance. This significant theoretical innovation system with “Renmin University of China school” characteristic is gradually taking shape.