Measuring the Position of China, Japan, and South Korea in the Global Value Chain of Digital Product Manufacturing and a Comparative Analysis of Their Competitiveness

Abstract

The rise of the digital economy has injected new momentum into global economic integration and is profoundly reshaping the landscape of the international division of labor. Although China has developed a substantial market scale and holds a considerable share in the digital product manufacturing industry, its development remains large in scale while lacking sophistication. A thorough investigation into the international division of labor position and competitive advantages of China, Japan, and South Korea in digital product manufacturing and its sub-sectors is of enormous significance for advancing the high-quality transformation of China’s manufacturing sector and fostering the leapfrog development of the digital economy. In the existing literature, few scholars have conducted systematic measurements and analysis of the global value chain (GVC) in the sub-sectors of digital product manufacturing. This paper addresses this gap by utilizing trade data at the HS 6-digit level from the UN Comtrade database, covering the period 2018-2022, for China, Japan, and South Korea. We calculate the trade performance of sub-sectors within the digital product manufacturing industry for the three countries and construct GVC position indices to evaluate their respective roles in the international division of labor. A comparative analysis is then undertaken to assess China’s position relative to Japan and South Korea. In addition, the study incorporates a set of international competitiveness indicators—namely the Market Share Index (MS), the Revealed Comparative Advantage Index (RCA), and the Trade Competitiveness Index (TC)—to further measure and compare the international competitiveness of the three economies. The findings can be summarized as follows: First, although China’s GVC position in digital product manufacturing is lower than that of Japan and South Korea, it has consistently maintained the world’s largest trade scale in this sector, demonstrating a strong comparative advantage and considerable international competitiveness. Second, from a sub-sectors perspective, Japan exhibits a well-developed R&D and innovation system in smart device manufacturing, granting it a distinct competitive edge that offers valuable lessons for China. Meanwhile, South Korea demonstrates strong industrial advantages in electronic component manufacturing, where it has established a complete domestic value chain and robust industrial clusters—an experience also worthy of reference for China.