Vertical Specialization and Inclusive Growth in China discusses the two interrelated developments that have transformed the Chinese economy in recent years. First, the global community has increased calls to foster inclusive economic growth, with China embracing this trend. Second, the explosive growth in China’s trade resulting from international vertical specialization production and trade networks which has complicated the notion of inclusive growth in the Chinese context.

This book assesses these two trends quantitatively, giving evidence of the link between vertical specialization and inclusive growth, and then decomposing the inclusive growth effects of vertically specialized trade into six components: GDP growth, export growth, FDI, environment, employment, and innovation. It further explores the differing impact of conventional trade and processing trade on inclusive growth, providing direction for future policy. This second book by the author to consider vertical specialization stresses the importance of integration in driving inclusive growth.

• Argues that inclusive growth and vertical specialization analyses must be performed together
• Gives quantitative evidence for the link between vertical specialization and inclusive growth in China
• Investigates the different impact of conventional trade and processing trade on transition to inclusive growth in China, using comparative analysis techniques
• Offers insight on forming future policy in China to increase inclusive growth