Why Exports Alone Can’t Make Poor Countries Rich

The video discusses the concept of trade flow and value-added in exports, using the example of the iPhone assembled in China. Xiao Jiang, an assistant professor, explains global value chains and the phenomenon of value-added erosion, where domestic value-added is reduced due to increased foreign intermediates. The video highlights the power dynamics in global value chains, with foreign firms often dominating high-value activities. Research findings show a link between high-skill foreign labor and value-added erosion. The video suggests careful engagement in global value chains and recommends industrial upgrading and labor protection as solutions.

What are the implications of high-skill labor embodied in a country's import content of export?

What role do labor unions play in countering the asymmetric power structure in global value chains?

How can countries upgrade themselves within the global value chain to capture more value-added?