By Hu Yaqi | China Daily | Updated: 2026-03-23 09:37

Currently, global value chains are accelerating adjustments as their risk of fragmentation rises, posing new challenges to developing countries. Against the backdrop, identifying a viable pathway to sustainable development within GVCs has become a pressing issue that warrants serious and sustained consideration.

From the perspective of new structural economics, fully leveraging comparative advantages to integrate into GVCs is a pragmatic path to achieving sustainable development goals.

The 2030 Agenda for Sustainable Development includes 17 SDGs and 169 targets, among which the promotion of "sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all" proposed in SDG 8 is an important foundation for achieving all the goals.

Poverty does not stem from a lack of labor, but rather from the long-term concentration of a significant number of workers in sectors with low productivity.

Constrained by industrial foundations, technological conditions and market environments, traditional agriculture and the informal economy remain the main employment channels for the Global South, and the quality of employment and income levels generally improve slowly.

Only by pursuing an appropriate path of industrialization that aligns with a country's conditions can economies continuously improve labor productivity and provide a stable foundation for sustained income growth and improved living standards, thereby achieving long-term and sustainable development.

China's path to modernization has provided a new choice for the Global South to explore sustainable development paths.

Since reform and opening-up, China has advanced industrialization in a gradual and pragmatic manner, grounded in its comparative advantages and evolving factor endowment conditions, achieving a virtuous cycle of employment expansion, income growth and industrial upgrading through participation in the international division of labor.

At the early stage, priority was given to the development of labor-intensive industries, enabling the country to actively integrate into GVCs and achieve rapid and sustained growth alongside large-scale employment expansion.

With capital accumulation and technological improvement, China has steadily upgraded its industrial structure, transitioning from factor-driven to innovation-driven development.

This transformation has been a development path rooted in comparative advantages, continuously enhancing endogenous growth capacity through expanded openness and deepened international cooperation.

China's experience demonstrates that adhering to comparative advantages, actively participating in GVCs, continuously improving infrastructure, and facilitating industrial upgrading through sound institutional construction and effective policy guidance is a vital pathway for latecomers to achieve long-term sustainable development.

GVCs facilitate countries to leverage their comparative advantages and realize mutually beneficial complementarity. By embedding themselves in GVCs, developing countries can start with production segments in which they possess a comparative advantage, and continuously expand employment, upgrade industrial structure and enhance economic resilience, which provides a solid foundation for achieving SDGs.

Currently, the Global South is becoming a key force driving global trade growth and reshaping GVCs. According to the United Nations Trade and Development's year-end global trade update, South-South trade expanded 8 percent year-on-year in 2025, higher than the overall growth rate of global trade.

Developing countries participating in GVCs should leverage their comparative advantages, follow the evolutionary dynamics of factor endowment and production structure, and pursue steady upgrading within a division of labor aligned with development stages, avoiding unrealistic "premature high-end" embedding.

Promoting open and inclusive cooperation in GVCs, and allowing countries to exchange their most competitive products and services through trade, are not only feasible paths to economic prosperity, but also effective ways to achieve SDGs.

However, influenced by factors such as the global financial crisis and technological changes, GVCs are undergoing structural reconstruction characterized by fragmentation, regionalization and digitalization.

Were the Global South to be forced to disengage from the international division of labor, the growth of export-oriented industries and manufacturing would be severely constrained — thereby hindering technological learning, industrial upgrading, and economic structural transformation.

Faced with the challenges brought by GVC reconstruction, the Global South — with advantages in demographic, resources and market endowments — can also take proactive actions to strengthen cooperation and coordination.

They can enhance development capabilities and rulemaking power, promoting the evolution of GVCs toward greater resilience, inclusiveness and sustainability.

In the process of accelerated adjustments of GVCs, the Belt and Road Initiative provides an important platform for the Global South to participate in the international division of labor, contributing to the stability and resilience of GVCs.

By strengthening industrial cooperation and infrastructure connectivity, the BRI focuses on improving participating countries' conditions to integrate into GVCs.

On the one hand, the BRI emphasizes promoting production capacity cooperation based on comparative advantages, guiding the rational layout of labor-intensive and related supporting industries, expanding employment, enhancing industrial capacity and facilitating the transition of the Global South from initial participation to getting more deeply embedding in GVCs.

On the other hand, the BRI focuses on key areas such as transportation, energy and digital infrastructure, addressing the long-standing infrastructure shortcomings faced by the Global South, reducing transaction costs, strengthening regional economic coordination and creating a more stable business environment for investment.

Against the background of structural transformation of GVCs, the construction of bilateral and multilateral mechanisms under the BRI framework is of prominent significance for continuous construction of GVC resilience, enhancement of industrial development and employment creation capabilities of the Global South.

Relying on the BRI, we could promote resilience of GVCs and common prosperity of the Global South in the process of high-standard opening-up and cooperation.

First, rooted in comparative advantages and development stages, we should promote the orderly integration of industries that align with economies' own comparative advantages into GVCs through production capacity cooperation, while actively expanding cooperation in new fields such as the digital economy and green technology, to cultivate new growth points and enhance participation levels in GVCs.

Second, we should promote the "hard connectivity" of infrastructure and improve the "soft connectivity" of rules and standards, to enhance resistance of the value chain, and reduce uncertainties brought by institutional differences.

Furthermore, we should strengthen the construction of bilateral and multilateral cooperation mechanisms, enhance the voice of the Global South in GVC governance and rulemaking, to promote the implementation of the four global initiatives and the building of a community with a shared future for mankind.

Through joint efforts under the BRI, the Global South is fully capable of building a stable and resilient value chain in open cooperation, embarking on a sustainable development path of mutual benefit, win-win cooperation and common prosperity.

The writer is an assistant researcher at the Institute of New Structural Economics, Peking University.

The views do not necessarily reflect those of China Daily.