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China’s New
Development
Strategies
Upgrading from Above and from
Below in Global Value Chains
Edited by
Gary Gereffi · Penny Bamber ·
Karina Fernandez-Stark
China’s New Development Strategies
Gary Gereffi · Penny Bamber ·
Editors
China’s New
Development
Strategies
Upgrading from Above and from Below in Global
Value Chains
Editors
Gary Gereffi Penny Bamber
Department of Sociology Duke Global Value Chain Center
Duke University Durham, NC, USA
Durham, NC, USA
Duke Global Value Chain Center
Durham, NC, USA
ISBN 978-981-19-3007-2 ISBN 978-981-19-3008-9 (eBook)

https://doi.org/10.1007/978-981-19-3008-9
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Contents
China’s Evolving Role in Global Value Chains: Upgrading

Strategies in an Era of Disruptions and Resilience 1
Gary Gereffi, Penny Bamber, and Karina Fernandez-Stark
Digital Technologies and China’s New Development

Strategies
China’s Industrial Internet: Platform-Based Manufacturing
and Restructuring of Value Chains 33
Boy Lüthje
Alibaba’s Distribution-Centered Approach Towards
the Industrial Internet: A Chinese Version of Industry 4.0? 61
Lea Schneidemesser and Florian Butollo
Subjective Social Upgrading and Downgrading
of Technical Workers in China’s High-Tech Economy:
A Company Case Study 85
Xia Yan
Active Local Governments and Firm Upgrading in China

Active Local Governments and New Chinese Firms
in Emerging Industries in Kunshan and Dongguan 113
Xun Zhang, Gary Gereffi, and Cassandra C. Wang
v
vi CONTENTS
Whither Global Value Chains: The Shifting Role

of Taiwanese FDI in Mainland China 141
Michael Murphree
Industrial Upgrading from Below: Can Chinese Local
Manufacturing Firms Reconfigure Global Value Chains? 167
Wei Zhao
Upgrading of Chinese Domestic Firms in Advanced
Manufacturing: Evidence from Industrial Robots
and High-Tech Medical Devices 195
Jing Zhao and Gary Gereffi
China’s Shifting Role in Regional and Global Value Chains

China’s Shifting Roles in Asian Electronics Trade
Networks: Implications for Regional Value Chains 237
Joonkoo Lee
The Reconfiguration of Global Value Chains in the Digital
Economy: Recent Trends and China’s New Agenda 267
Ying Qiu
Notes on Contributors
Bamber Penny is a global value chain specialist, with more than a decade
of experience working at the Duke Global Value Chains Center. She has
contributed significantly to the development of the global value chain
framework, particularly with respect to the intersection between interna-
tional business and country-level development policy. She has published
extensively, contributing to numerous books, reports, and journal arti-
cles on economic growth and development, technology and skills for
the future, and the role of gender among others. Penny has consulted
and provided policy analysis widely for national and international orga-
nizations, including the World Bank, the Organization for Economic
Cooperation, UNCTAD, ILO, the African Development Bank, and the
Inter-American Development Bank.
Dr. Butollo Florian is head of the research group “Working in highly-
automated digital-hybrid processes” at the Weizenbaum Institute for the
Networked Society and leader of the research project “Industrial Internet
Platforms, Restructuring of Production Networks, and Work in China
and Germany” both at Berlin Social Science Center. His research interests
are digitalization and work, work in global production networks, and the
transformation of work in China.
Fernandez-Stark Karina is an international consultant and a Duke
Global Value Chains Center affiliate, who has led numerous research
projects related to economic development and competitiveness around
vii
viii NOTES ON CONTRIBUTORS
the world. She has consulted for the African Development Bank, ECLAC,
Inter-American Development Bank, OECD, UNCTAD, and the World
Bank, among others. Together with Gary Gereffi, Karina authored the
highly cited book Global Value Chain Analysis: A Primer. She has
published several research reports and articles on industrial upgrading
and social and economic development. Her research continuously brings
a policy focus on advising country governments on different continents.
Karina has conducted Global Value Chains workshops in Africa, Asia, and
the Americas.
Gereffi Gary is Emeritus Professor at Duke University in Durham, NC,
and Founding Director of the Duke Global Value Chains Center. He is
one of the originators of the global value chains framework, and he has
published over a dozen books and numerous articles on globalization,
industrial upgrading, and development strategies in various regions of the
world. Recent books include Handbook on Global Value Chains (Stefano
Ponte, Gary Gereffi, and Gale Raj-Reichert, co-editors) (Edward Elgar
Publishing, 2019); Global Value Chains and Development: Redefining the
Contours of 21st Century Capitalism (Cambridge University Press, 2018);
and Global Value Chains in a Postcrisis World: A Development Perspective
(Olivier Cattaneo, Gary Gereffi, and Cornelia Staritz, co-editors) (The
World Bank, 2010).
Lee Joonkoo is Associate Professor of Organization Studies, School of
Business at Hanyang University in Seoul, Republic of Korea. Prior to
joining Hanyang, he was a Postdoctoral Research Scholar at the Social
Science Research Institute at Duke University from 2011 to 2012. He
was a visiting research fellow at Seoul National University Asia Center
from 2014 to 2015. His main areas of research include globalization and
development, specifically global and regional value chains, value chain
governance, and economic and social upgrading in apparel, electronics,
and cultural/creative industries, focusing on Asia. He co-authored a book
titled Mobile Asia Capitalisms, Value Chains and Mobile Telecommuni-
cation in Asia (Seoul National University Press, 2018). His work has
appeared in Proceedings of the National Academy of Sciences of the United
States of America, Journal of Business Ethics, Industrial and Corporate
Change, and International Labour Review among others.
Prof. Lüthje Boy is Director of the Technology and Industry Research
Center at the Institute of Public Policy (IPP) at South China University
NOTES ON CONTRIBUTORS ix
of Technology in Guangzhou. He held the Volkswagen Endowed Chair

Industrial Relations and Social Development at Sun Yat-sen University
School of Government from 2015 to 2019. Lüthje is a noted expert
on global production networks and the digitalization of manufacturing
in the electronics, automotive, and other manufacturing industries. He
is the author of numerous papers and books on these topics as well as
on industrial relations in China. He received his Ph.D. from the Univer-
sity of Frankfurt in Germany in 1991, where he became an assistant
professor. Since 1999, he has worked as a senior research fellow at the
Frankfurt Institute for Social Research. He held appointments as visiting
scholar at the University of California Berkeley, the East-West Center,
Honolulu, Hawaii, Renmin University of China in Beijing, the Global
Labor University and others.
Murphree Michael is Assistant Professor of International Business in the
Darla Moore School of Business at the University of South Carolina.
He earned his Ph.D. in Science Technology and International Affairs
at the Georgia Institute of Technology in 2014. Professor Murphree’s
primary research interests include global value chains, industrialization,
and economic upgrading, innovation in emerging economies, technology
standards, and intellectual property rights. He speaks fluent Mandarin and
has conducted field research in the Greater China Region since 2007.
His China-based research has been widely published and his 2011 book
(co-authored with Dan Breznitz), The Run of the Red Queen: Govern-
ment, Innovation, Globalization, and Economic Growth in China, was
the winner of the 2012 British International Studies Association Susan
Strange Best Book Award and bronze medalist for the 2012 Axiom
Business Book Award for International Business/Globalization.
Schneidemesser Lea is a research fellow at the Weizenbaum Institute for
the Networked Society where she is part of the research project “Indus-
trial Internet Platforms, Restructuring of Production Networks, and Work
in China and Germany” and at the Max Weber Center at Erfurt Univer-
sity where she researches Chinese outbound foreign direct investment
(OFDI) in Germany and the European Union (EU). Her research inter-
ests are the digitalization and application of platforms in industrial sectors,
work in global production networks, and Chinese OFDI in Germany and
the EU.
x NOTES ON CONTRIBUTORS
Dr. Wang Cassandra C. is Professor in the School of Earth Sciences,

Zhejiang University. Her research interests include transboundary knowl-
edge/technology spillovers and firm innovation, industrial and regional
development, e-commerce adoption, and rural development, etc. Her
work widely appears in the peer-reviewed international journals such as
Journal of Economic Geography, Economic Geography, Journal of Rural
Studies, International Business Review, Environment and Planning A,
Urban Studies, among many others.
Yan Xia is a postdoctoral fellow at the School of Sociology and Anthro-
pology of Sun Yat-sen University. She gained her Ph.D. from the
University of Hong Kong. Her research interests include the gover-
nance of R&D in China’s high-tech industry, the work and social
mobility of high-skilled knowledge workers, and Chinese governance and
consumption.
Qiu Ying is Associate Professor and Associate Dean of the School of
Economics, Jiangxi University of Finance and Economics. She is also a
postdoctoral fellow at the Research Institute for Global Value Chains,
University of International Business and Economics. Her main research
areas are the digital economy and global value chains. She has published
widely both within China and abroad. She has led and participated in
multiple national, provincial, and ministerial-level research projects in
China, including for the National Natural Science Foundation of China.
She is the recipient of several prestigious awards, including the Chinese
Enterprises’ Reform and Development Achievement Award. She holds
leadership positions in a number of local government and academic asso-
ciations, including the Deputy Secretary-General of China Digital Trade
30 Forum.
Zhang Xun is currently a researcher at a non-governmental organization
(NGO) in China. He was previously a fellow at Teach for China from
2020 to 2022 and earned his master’s degree in public policy from Duke
University in 2020. His research interests include global value chains and
international development.
Zhao Jing is an Associate Professor in the Research Institute for Global
Value Chains at the University of International Business and Economics
(UIBE) in Beijing. She received her Ph.D. degree from Tsinghua
University. She was a visiting scholar at UC Berkeley and the Organi-
sation for Economic Co-operation and Development (OECD) in Paris.
NOTES ON CONTRIBUTORS xi
Her research focuses on global value chains, fiscal policies, industrial

upgrading, and the Chinese economy. She has research projects jointly
with the OECD, United Nations Industrial Development Organiza-
tion, Asian Infrastructure Investment Bank, and National Natural Science
Foundation of China.
Zhao Wei is Associate Professor at ESSCA School of Management
(France) and Senior Fellow at Institute for Pearl River Delta Reform
and Development (China), where he conducts policy research for Chinese
local governments on industrial upgrading, innovation strategy, and elec-
tric vehicle battery sector. He holds a master’s degree in Sociology from
Sun Yat-Sen University and a Ph.D. in Economics from Paris 3 University
la Sorbonne Nouvelle.
List of Figures
Active Local Governments and New Chinese Firms in

Emerging Industries in Kunshan and Dongguan
Fig. 1 Industrial evolution of top 6 two-digit manufacturing sectors
in Kunshan and Dongguan, 1998–2009 124
Fig. 2 Distribution of ICT manufacturing industry in Kunshan
and Dongguan by output value in selected years (2000,
2003, 2006, 2009) 125
Fig. 3 Distribution of ICT manufacturing industry in Dongguan
by annual industrial value added, 2010–2020 128
Fig. 4 FDI dependency of the ICT industry in Kunshan
and Dongguan, 2010–2020 129
Whither Global Value Chains: The Shifting Role of

Taiwanese FDI in Mainland China
Fig. 1 Taiwanese OFDI to Mainland China—1991–2020 144
Fig. 2 Electronics manufacturing industry as a percent of Total
Taiwanese OFDI (1991–2019) 146
Fig. 3 Categories of electronics industry OFDI by investment
volume 152
Fig. 4 Investment by regions (1991–2020) 153
Fig. 5 Taiwanese manufacturing and service in China (2007–2020) 157
xiii
xiv LIST OF FIGURES

Manufacturing Firms Reconfigure Global Value Chains?
Fig. 1 Supply chain of LED industry 176
Fig. 2 Supply chain of EV battery industry 179

Manufacturing: Evidence from Industrial Robots and
High-Tech Medical Devices
Fig. 1 China’s imports and exports of industrial robots
with the whole world 201
Fig. 2 China’s exports of industrial robots to the US and Europe
by exporters’ ownership 201
Fig. 3 Annual installation of industrial robots in China by supplier
ownership 202
Fig. 4 Major suppliers of key components and robot bodies
in the Chinese market of industrial robots 203
Fig. 5 China’s imports and exports of high-tech medical devices
with the whole world 206
Fig. 6 China’s exports of high-tech medical devices to the US
and Europe by exporters’ ownership 207
Fig. 7 Top 10 firms in the Chinese domestic CT and MRI market 209

Networks: Implications for Regional Value Chains
Fig. 1 Organizational and spatial dimension of production 240
Fig. 2 Electronics value chain: a stylized illustration 242
Fig. 3 The world’s electronics exports, 2007–2018 246
Fig. 4 Inter-regional electronics trade networks, 2007 and 2018 249
Fig. 5 Intra-Asian electronics trade networks: finished
and intermediate goods, 2007 and 2018 251
Fig. 6 Semiconductor intra-Asian trade networks: finished
and intermediate goods, 2007 and 2018 254
Fig. 7 Mobile phone intra-Asian trade networks, 2007 and 2018 255
The Reconfiguration of Global Value Chains in the Digital

Economy: Recent Trends and China’s New Agenda
Fig. 1 Evolution of value-added and participation in GVCs
from 1970 to 2017 268
LIST OF FIGURES xv
Fig. 2 Changing intra-regional and inter-regional GVC shares

in RVCs from 1990 to 2015 271
Fig. 3 Evolution of business segments under forward decomposition
of value-added from 1995 to 2017 273
Fig. 4 The scale and proportion in GDP of China’s digital economy
from 2014 to 2019 284
List of Tables
China’s Industrial Internet: Platform-Based Manufacturing

and Restructuring of Value Chains
Table 1 China top-ten cross-industry IIoT platforms, 2019 43
Table 2 Guangdong industrial Internet pilot clusters (2019 first
series) 44
Subjective Social Upgrading and Downgrading of

Technical Workers in China’s High-Tech Economy: A
Company Case Study
Table 1 Development of China’s high-tech industry 1996–2018 86
Table 2 Telecom’s upgrading trajectory and technical workers’ OSU 93
Active Local Governments and New Chinese Firms in

Emerging Industries in Kunshan and Dongguan
Table 1 Styles of local state governance in Kunshan and Dongguan,
1990s–2010s 121
Table 2 Computer manufacturing sub-industry export as a share
of total computer manufacturing exports in Kunshan
and Dongguan, 2003 and 2009 126
Table 3 Top 5 business groups dominating the computer
manufacturing industry in Kunshan and Dongguan
and their concentration ratio (CR5) in 2009 126
xvii
xviii LIST OF TABLES
Table 4 Priority firms with a registered capital above 50 million

yuan in Kunshan’s 13th five-year plan on industrial
economy (2016–2020) 130
Table 5 Priority firms with a registered capital above 50 million
RMB and research institutes in strategic emerging
industries in Dongguan’s 13th five-year plan (2016–2020) 133
Table 6 Songshan Lake Hi-Tech Industrial Development Zone’s
role in the development plan of Dongguan’s strategic
emerging industries 135
Whither Global Value Chains: The Shifting Role of

Taiwanese FDI in Mainland China
Table 1 Eras of Taiwanese FDI in China 143

Manufacturing Firms Reconfigure Global Value Chains?
Table 1 Types of industrial upgrading: effort and effect 172
Table 2 Focal industries and firms in the Huizhou Cluster 175
Table 3 Patterns and paths of industrial upgrading of firms
in Huizhou Clusters 181

Manufacturing: Evidence from Industrial Robots and
High-Tech Medical Devices
Table 1 China’s central government’s policies on robots
(non-exhaustive list) 220
Table 2 China’s central government’s policies on high-tech medical
devices (non-exhaustive list) 222
Table 3 China’s local governments’ recent policies on robots
(non-exhaustive list) 224
Table 4 China’s local governments’ recent policies on high-tech
medical devices (non-exhaustive list) 228

Networks: Implications for Regional Value Chains
Table 1 Electronic products and SITC codes 244
Table 2 Electronics subsectors and HS-based product classification 245
LIST OF TABLES xix
Table 3 East Asia in the world’s electronics export (Unit: US$

billion, %) 247
Table 4 The world’s leading electronics exporting countries, 2018 248
Table 5 Intra- and extra-regional electronics trade: finished goods 261
Table 6 Intra- and inter-regional electronics trade: intermediate
goods 262
Table 7 East Asia’s electronics exports by region: finished goods 262
Table 8 East Asia’s electronics exports by region: intermediate
goods 263
China’s Evolving Role in Global Value
Chains: Upgrading Strategies in an Era
of Disruptions and Resilience
Gary Gereffi, Penny Bamber, and Karina Fernandez-Stark
1 Introduction
Globalization has linked the growth prospects of national economies and
regions to the international trade and production networks associated
with global value chains (GVCs) from the 1960s to the present. For most
of this period, the expansion of trade and foreign direct investment (FDI)
grew steadily, and a country’s level of development was closely tied to
the nature of its participation in GVCs (World Bank 2020). Indeed, the
belief that export-oriented industrialization was the best way for large and
G. Gereffi (B) · P. Bamber · K. Fernandez-Stark

Department of Sociology, Duke University, Durham, NC, USA
e-mail: ggereffi@duke.edu
P. Bamber
e-mail: penny.bamber@duke.edu
K. Fernandez-Stark
e-mail: karina.stark@duke.edu
P. Bamber · K. Fernandez-Stark
Duke Global Value Chain Center, Durham, NC, USA
© The Author(s), under exclusive license to Springer Nature 1

Singapore Pte Ltd. 2022
G. Gereffi et al. (eds.), China’s New Development Strategies,
https://doi.org/10.1007/978-981-19-3008-9_1
2 G. GEREFFI ET AL.
small developing countries alike to achieve rapid economic growth and

increase per capita incomes became the dominant development orthodoxy
in the 1980s (Gereffi 2014). However, the global recession of 2007–
2008 disrupted this rosy view as economic slowdowns slashed imports
in the most developed nations of North America and Western Europe,
which caused exports in the most dynamic economies of East Asia, Latin
America, and Africa to fall dramatically. Within a few years, export growth
after the “great trade collapse” began to rebound (Baldwin and Taglioni
2009; Cattaneo et al. 2010) but confidence in the export-oriented model
of development was badly shaken. Subsequently, more serious challenges
to the stability of the global economy have emerged. Most recently,
the COVID-19 global pandemic brought dramatic shortages of medical
supplies needed to treat the novel coronavirus. Unprecedented spikes in
demand in 2020 were coupled with industry shutdowns that disrupted
global trade flows, curtailing the availability of a wide variety of goods and
services, from essential medical and food supplies to everyday commodi-
ties like toilet paper, and most public transport and retail services. The
alleged culprit ranged from overly rigid modern supply chains (O’Leary
2020; O’Neil 2020; Shih 2020) to concern that we may have reached the
end of globalization as we know it (Farrell and Newman 2020).
This book examines China’s new development strategies within this
changing global context. In the past two decades, China has surged to
become the leading global export economy in 2020 with its exports
reaching US$ 2.6 trillion, ahead of the United States (US$ 1.43 trillion)
and Germany (US$ 1.38 trillion) (WTO 2022). However, understanding
China’s rise in the global economy as well as its future development
trajectory raises a series of fundamental issues that we analyze in this
book. These include the changing geopolitical realities in the post-
Washington Consensus era; the unique role played by the Chinese state
and varied forms of industrial policy that reorient China’s development
strategy toward advanced technologies and its giant domestic market;
and the implications of the emerging digital economy and the so-called
Fourth Industrial Revolution for China’s potential to become a global
technological leader in the twenty-first century.
For major industrialized countries and regions, global supply chains
have become strategic policy concerns (O’Neil 2021), and these
economic powers are devising strategies to improve their resilience to
trade shocks. The United States launched the “Building Resilient Supply
Chains” initiative to identify supply-chain vulnerabilities and to develop a
CHINA’S EVOLVING ROLE IN GLOBAL VALUE … 3
set of recommendations for strengthening the “resilience” of critical U.S.

supply chains (The White House 2021). The EU is applying a policy mix
that aims to increase domestic capacity, diversify suppliers and support the
multilateral rules-based trade environment (European Parliament 2021).
The notion of resilience implies the ability of an organization or a system
to adapt to shocks and disruptions. However, it is a multidimensional
concept that has different meanings across three interconnected levels:
the firm (operational efficiency versus risk management options to achieve
flexibility); global industries or GVCs (appropriate governance structures
to organize networks of firms in distinct industrial and geographic config-
urations); and the nation-state (national security and long-term economic,
social, and environmental goals) (Gereffi et al. 2022).
For China, global supply-chain disruptions also have strategic implica-
tions. In the 1990s and 2000s, the acceleration of China’s export-oriented
industrialization model allowed it to become the “world factory” across
a diverse range of low-tech, mid-tech, and high-tech products and indus-
tries. China exemplifies the phenomenon of “compressed development”
since it accomplished in just 40 years what took centuries for earlier indus-
trializers to attain (Whittaker et al. 2020). China’s impressive economic
performance has been achieved through clear and active national policy
goals formulated by the central government (controlled by the Chinese
Communist Party), operationalized in ambitious Five-Year Plans, and
implemented through local government initiatives. Over the past decade,
however, China’s ambitions to become a technological superpower have
clashed with protectionist U.S. policies to limit China’s imports, and
broader concerns among advanced industrial economies over the impli-
cations of China’s rising prominence in core technologies. This has led
to U.S. and European campaigns against Chinese technology companies
such as Huawei and ZTE, and sparked an innovation race in numerous
high-tech fields such semiconductors, artificial intelligence, cloud and
quantum computing, electric vehicles and self-driving cars, and clean
energy (Foreign Policy 2021; Jin 2022; The Economist 2021).
In the context of these debates, this book uses the GVC framework
to unpack how China has so successfully inserted itself into the global
economy, and more importantly, to assess recent efforts to fundamentally
reorient its development strategy to focus on advanced manufacturing and
indigenous innovation with a greater emphasis on the domestic economy.
4 G. GEREFFI ET AL.
To analyze these objectives, we distinguish between two broad orien-

tations in China’s new development strategies, namely upgrading from
above and upgrading from below.
Upgrading from above refers to the major policy initiatives and reforms
launched by China’s central government since China’s “Open Door”
policy initiated by Deng Xiaoping in 1978 to open China to international
trade and foreign businesses that wanted to invest in the country. Our
focus in this book will be on the recent policies aimed at upgrading from
above, which include the Made in China 2025 initiative launched in 2015,
the Belt and Road Initiative (2015), the Dual Circulation policy (May
2020), and the 14th Five-Year Plan (2021–2025) published in 2021.
Together, these plans outline the country’s goals for a new development
agenda to upgrade China into higher value, advanced technology indus-
tries that focus on the domestic economy. These objectives are summa-
rized in the “Dual Circulation” concept introduced in China’s 14th
Five-Year Plan: “It targets the expansion of domestic demand through
strengthened supply chains supported by industrial policies, indigenous
innovation, and increased domestic consumption. This approach envis-
ages less reliance on heavy industries by proposing a new target to increase
the share of the strategic emerging industries (i.e., advanced manufac-
turing, including high-end machinery and equipment, advanced materials,
and electric vehicles) from 11.5% of GDP in 2019 to over 17% by 2025”
(Asian Development Bank 2021).
Upgrading from below refers to the wide variety of local policies,
institutions, firm strategies, and labor market shifts that allow us to under-
stand how China’s top-down programs translate into industrial growth
on the ground. To assume that China’s central government initiatives
automatically translate into dynamic and diversified export industries and
technological progress based on a large labor pool and a strong domestic
market is simplistic. It ignores the heterogeneous and fragmented nature
of the country’s industries and provides little basis to interpret how
China’s policies might impact the global economy in the future. Most of
the chapters in the book focus on the manifold mechanisms of upgrading
from below in China in recent decades with an emphasis on changes since
2010. The main drivers of upgrading from below highlighted in the book
include: (1) local government policies, which are a major driver of change
and vary by region, by sector, and over time in China; (2) foreign direct
investment (FDI), which has been a critical element in the upgrading
of technological capabilities for export-oriented production in different
localities and industries; (3) the rapidly growing domestic market , which
has facilitated upgrading in both the upstream and downstream stages of
GVCs in China, particularly after the change in regulations in 2008 that
allowed export-oriented firms to sell products on the domestic market;
and (4) a small but growing focus on innovation at the firm level that
helped drive upgrading into new high-tech industries.
The remainder of this chapter is organized as follows. Section 2
outlines why the GVC perspective is a critical analytical tool to help us
understand China’s evolving role in the global economy, and Section 3
provides additional details on China’s development strategies since 1978.
Section 4 further unpacks the upgrading from above and from below
perspectives based on selective findings from the book, while Section 5
describes the organization of this volume and the contributions of its
individual chapters. Section 6 concludes with some reflections on the rele-
vance of our analysis of China’s development for other countries in the
world.
2 Global Value Chain Perspective

Over the past three decades, GVCs have become an integral part of
the global economy, reshaping the traditional patterns of international
production and trade. Participation in GVCs has contributed to economic
growth and development in both advanced and developing economies
around the world. Insertion into GVCs alone, however, does not neces-
sarily translate into positive gains from FDI or trade. To benefit from
GVC participation, countries must be able to sustain and upgrade their
competitiveness over time, mainstream trade into their broader national
development goals, build internal capacity, and generate more and better
jobs. Thus, it is not only a matter of whether to participate in the global
economy but how to do so gainfully.
The GVC framework, which was developed in the early 2000s,
focuses on how the structure and dynamics of global industries shape
the upgrading options for countries and firms in the global economy
(Gereffi 2018, Chapter 1). Thus, it draws together the macro (global),
meso (industry and country), and micro (firm and community) levels
to understand the challenges of development at different spatial scales.
Given the immense complexity of today’s cross-border supply chains,
the GVC methodology is a useful tool to trace the shifting patterns of
6 G. GEREFFI ET AL.
global production within and across multiple industries in developed and

developing economies alike.
2.1 What Are GVCs?

The value chain describes the full range of activities that firms and
workers perform to bring a product from its conception to end use
and possible reuse through the circular economy. This includes activities
such as research and development (R&D), design, production, marketing,
distribution, and sale to the final consumer. The activities that comprise
a value chain can be contained within a single firm or divided among
different firms around the world (Gereffi and Fernandez-Stark 2011). In
the context of globalization, the activities that constitute a value chain
have generally been carried out in inter-firm networks on a regional or
global scale.
GVC analysis provides a holistic view of global industries—both from
the top-down (e.g., examining how lead firms “govern” their global affil-
iates and inter-firm supplier networks) and from the bottom-up (e.g.,
examining how business decisions affect the trajectory of economic and
social “upgrading” or “downgrading” in specific countries and industries)
(Gereffi and Fernandez-Stark 2016). These form the two main concep-
tual pillars of the GVC framework: governance structures and upgrading
trajectories.
Governance of GVCs is the key concept for the top-down view. GVC
governance is defined as “authority and power relationships that deter-
mine how financial, material, and human resources are allocated and flow
within a chain” (Gereffi 1994). It focuses mainly on lead firms and the
organization of international industries. While GVC analysis shares a firm-
centric approach with the international business literature, it goes beyond
the hierarchical governance of a firm (i.e., vertical integration and head-
quarter–subunit relations), and extends to various forms of contractual
and relational coordination between independent companies that span
international borders. In addition to these corporate forms of governance,
the GVC approach also pays attention to public and social governance and
the institutional factors that shape them (Gereffi et al. 2005; Mayer 2014;
Gereffi and Lee 2016).
Upgrading is the main concept for the bottom-up perspective. In
contrast to governance’s focus on the power of lead firms, upgrading
looks at the bottom-up strategies used by countries, firms, and workers
to maintain or improve their positions and outcomes in the global

economy. It refers to “a process of improving the ability of a firm or an
economy to move to a more profitable and/or technologically sophisti-
cated capital- and skill-intensive economic niche” (Gereffi 1999), or more
simply put, “to move from low-value to relatively high-value activities in
global production networks” (Gereffi 2018). The GVC approach does
not simply assume that integration to GVCs leads to economic upgrading
through positive spillovers, but seeks to establish under what conditions,
particularly under what GVC governance arrangements, upgrading (or
downgrading) is likely to occur (Humphrey and Schmitz 2002; Barrientos
et al. 2011).
Traditionally, a firm/country could upgrade its participation in a
production model in four distinct ways: (1) product upgrading —the shift
to make a higher value product; (2) process upgrading —improving the
efficiency of production systems, for example, by incorporating more
sophisticated technology; (3) functional upgrading —moving into higher
value stages in the chain that require additional skills; and (4) chain or
intersectoral upgrading – entry into a new value chain by leveraging
the knowledge and skills acquired in an existing chain (Humphrey and
Schmitz 2004). For example, functional upgrading can be seen in the
trajectory of manufacturing or export roles such as assembly, original
equipment manufacturing (OEM), original brand manufacturing (OBM),
and original design manufacturing (ODM) that characterized East Asian
producers in apparel and a variety of other industries (Gereffi 2019).
While this early typology is quite resilient and widely used, it is relatively
static. It does not tell us how these types of upgrading might be linked
or evolve over time.
Early use of GVC methodology focused mainly on economic compet-
itiveness, but more recently social and environmental dimensions have
also been incorporated. GVC research is now exploring new topics such
as labor regulation issues, workforce development, the greening of value
chains, and gender (e.g., (Barrientos et al. 2011; Gereffi et al. 2021b; De
Marchi et al. 2019; Ponte 2019; Barrientos 2019; Gereffi et al. 2011).
Today, GVC analysis is one of the preferred methodologies for exam-
ining global industries, international trade dynamics, and how vulnerable
economic actors engage in supply chains that are frequently subject to
disruptions and acute shortages, as typified by the COVID-19 global
pandemic (Gereffi and Lee 2012; Barrientos et al. 2011; Gereffi 2020;
Gereffi et al. 2022).
8 G. GEREFFI ET AL.
2.2 GVC Framework and Development Policy

The comprehensive nature of the GVC framework allows policy makers
to answer development questions largely ignored by previous paradigms.
As policy makers and researchers alike have become aware of the pros
and cons of globalization, the GVC framework has tackled novel topics
such as the role of emerging economies like China, India, and Brazil as
drivers of GVCs, the proliferation of private regulations and new product
and process standards, and increased attention to social and environ-
mental upgrading (Lee 2010; Mayer and Gereffi 2010). Over the past two
decades, numerous international development organizations have adopted
the GVC framework to understand how countries can better engage in
global trade (World Bank 2020; African Development Forum and World
Bank 2021).
GVC industrial policy differs from previous approaches (Rodrik 2007;
Kaplinsky and Morris 2016; Baldwin 2014; Gereffi and Sturgeon 2013) in
which industrialization involved building relatively complete supply chains
at home. Considerably more nuanced than blunt trade policy instruments
that can have unintended consequences (Gereffi et al. 2021a), such as
tariffs or trade bans, GVC-oriented policies operate within the geographic
and organizational complexity of globalized industries. GVC-oriented
policies are designed to deepen the ties countries have within these chains
and to increase the gains from GVC trade over time. These include human
capital development, standards compliance, investment strategies, local
firm development, trade policy, and infrastructure improvement, among
others (Bamber and Fernandez-Stark 2019).
3 China’s Evolving Role in the Global Economy

Since China’s economic reform and opening in 1978, China’s role as the
“world’s factory” has catapulted it to the position of the second largest
economy in less than half a century. While China’s growth has inevitably
slowed over time as the economy matured, it remained impressive at 5.9%
in 2019 prior to the coronavirus pandemic (2022 goal: 5.5%). With a
gross domestic product (GDP) of US$ 14.7 trillion in 2021, most analysts
expect China to overtake the US as the world’s largest economy (GDP
2021: US$ 21 trillion) during the course of the next decade (World Bank
2022).
China’s economic growth was spurred by significant inbound foreign

investment, but outbound investment has also become important as
China positions itself abroad. By 2020, China was the world leader in
both global inbound and outbound FDI. Inbound FDI grew significantly
after the country’s ascension to the WTO in 2001; since the turn of the
last century, more than US$ 3 trillion have flowed into China, accounting
for approximately 9% of world FDI flows (Paterson 2021). In 2020, it was
the second largest recipient of FDI, after the United States, attracting
close to US$ 150 billion in investment despite the dampening effect of
the global pandemic (UNCTAD 2022). In 2020, the country also topped
the list of outbound FDI with US$ 132 billion (UNCTAD 2022).
China has become the world’s top exporter (US$ 2.6 trillion, 2020)
and the second largest importer (US$ 2.1 trillion, 11.5%). In just 40
years, the country’s exports have grown from a negligible base to account
for 15.2 % of world merchandise trade, almost as much as the next two
largest exporters - the US (8.4%) and Germany (8.1%)—combined (WTO
2022). In imports, it trails only the United States (US$ 2.4 trillion,
13.5%) and is already twice the size of Germany (6.6%) (WTO 2022).
Trade has not been limited to final goods; in its role as a major assem-
bler, it has become the second largest importer of intermediate goods,
continuing to gain market share from 9.5% (2005) to 14.4% in 2019.
At the same time, there is tremendous growth in intermediates goods
exports, with its global share doubling from 6.7% (2005) to 13.4% in
2019 (WTO 2022). Finally, the country has also become a major contrib-
utor of global services trade and is now the fourth largest exporter of
commercial services (WTO 2022).
China’s dominance in trade covers multiple industries and partners.
The country ranks among the top five importers and exporters in most
sectors from light manufacturing (e.g., textiles and apparel), to automo-
tive and heavy industry, including iron and steel and chemical production.
Notably, it is also among the largest importers of commodities, food, fuel
and mining products (WTO 2022). China has become a major trading
partner for numerous countries, accounting for significant shares of their
exports. This is true not just for regional partners, but also raw mate-
rial suppliers from further afield. Australia, the Democratic Republic of
the Congo, Namibia, Brazil, Myanmar, Republic of Korea, New Zealand,
Japan, Viet Nam, Uruguay, Indonesia and Qatar are among those that
export more than 10% of their outbound trade to China (UN Comtrade
2022).
10 G. GEREFFI ET AL.
These changes to China’s participation in the global economy have

been characterized by three stylized phases of development:
1. Export-oriented industrialization—Following China’s economic

reform and opening up, the country became an important desti-
nation for FDI. Its competitiveness was built primarily on China’s
endowments of labor and natural resources, supported by low
wages, worker migration from the interior to coastal provinces, and
growing economies of scale. By the late 1990s, foreign enterprises
accounted for about half China’s exports. By 2006, the number had
risen to 60% (National Bureau of Statistics of China 2022).
2. Shift toward domestic markets and investment—Following the
2008 global economic crisis, slowing global demand disrupted the
export-oriented model that had driven China’s growth for the
prior three decades. At the same time, changes to the labor laws
contributed to a significant rise in costs at home and impacted
Chinese manufacturing competitiveness in the shrinking global
market. This period also corresponded to the maturing of China’s
domestic market, which was booming in the early 2010s thanks to
rising purchasing power of Chinese consumers and the strength-
ening of local suppliers. These shifts were visible in both trade
intensity and the relative importance of FDI in China. The trade
to GDP ratio fell steadily from its pre-crisis peak of 64% (2006)
to 34% in 2020 (World Bank 2022). FDI’s relative importance to
China’s economy diminished substantially as domestic sources of
investment expanded. Although FDI inflows to China tripled in
absolute terms between 2002 and 2019, its share of China’s total
gross fixed capital formation fell from 10.3% to just 3% of total
investment (Paterson 2021). By 2019, foreign enterprises accounted
for just 39% of China’s exports (National Bureau of Statistics of
China 2022).
3. Advanced manufacturing, indigenous innovation, and the
expanding global footprint of Chinese lead firms—By 2015,
under the leadership of President Xi Jinping, China began to
promote initiatives to reduce its dependence on producing cheap
low-tech products and to highlight instead the production of
high-tech goods and services associated with the digital economy,
including those designed in China and under Chinese brands.
During this period, China’s R&D expenditure increased signifi-

cantly, reaching US$ 462 billion in 2018, a nearly 12-fold increase
since 2000 (OECD 2022). Chinese firms accounted for 14.5% of
PWC’s Global Innovation 1000 ranking, up from 2.5% in 2012
(PwC 2022). Almost half of the patents in the world were filed
by China, twice as many as the United States (WIPO 2020). By
2019, China (119) was virtually tied with the United States (121)
in terms of the number of firms listed among the 500 largest MNCs
in the world (Mourdoukoutas 2019). One in three global “uni-
corns” (startups valued at $1 billion or above), many linked to the
digital economy, were based in China (trailing only the US, which
had one-half of unicorns) (MGI 2017). Innovative Chinese firms
now include global household names such as Alibaba, BYD, Didi,
Huawei, Midea, and Shein, and China is one of the world’s largest
outbound investors. The Belt and Road Initiative, underway since
2015, has sought to connect outbound FDI to new markets, while
strengthening trade routes with mature markets.
4 Upgrading from Above and from Below

As discussed earlier, the chapters in this volume explore how China’s
development strategies have evolved through a combination of both top-
down and bottom-up initiatives that we label “upgrading from above”
and “upgrading from below,” respectively. The chapters contain empir-
ical details that are particularly useful in analyzing the upgrading from
below perspective, which is often lacking in discussions of China’s rapid
economic growth in recent decades. In this section, we highlight how
some of the findings from chapters in this volume contribute to a deeper
understanding of upgrading dynamics in China.
While the central government sets out the pillars for future growth, it is
generally at the local level—be it municipal, city, or provincial—that these
pillars are effectively put into practice with specific policy instruments
regarding investment, human capital, and public–private cooperation
among others. Each local government interprets, adopts, and adapts
the central government’s guidelines based on its own competitiveness
factors and local economic development goals. Individual firms respond
to these local policies and incentives based on their own strategies and the
opportunities for growth that they identify.
Much of China’s progress in GVCs has occurred via process and product
upgrading. These upgrading activities have mainly focused on improving
production efficiency in manufacturing, labor issues, and product quality
control and testing. By 2020, process upgrading included the digitalization
of factory operations and the installation and use of intelligent manufac-
turing systems. The first industries to incorporate automated technologies
in their operations in China were the mobile phone and automotive
sectors (IFR 2022). The need to reduce costs and enhance reliability of
output was prevalent in the operations of both local and foreign firms
in the country. Chapter 6 analyzes the evolution of upgrading among
foreign (Taiwanese) subsidiaries in the electronics sector, while Chapter 7
examines the paths taken by multiple Chinese suppliers in the LED and
mobile terminals industries in Huizhou City (PRD).
Since 2010, functional and market upgrading trajectories have become
more prominent as firms have shifted to serve both foreign and domestic
markets; this dual strategy is practiced across various industries in China
(Butollo and Ten Brink 2018). The disruption to export-oriented demand
caused by the 2008 global economic crisis forced firms to pivot to the
domestic market to ensure sales. New capabilities were developed in
marketing and sales and new brands were created for the Chinese market.
Many of the factories operating across China, accustomed to responding
to orders from foreign buyers, lacked marketing departments with skills to
promote domestic sales. For example, Chapter 7 provides a detailed case
study of Ledman LED’s pivot toward the domestic market. In the LED
industry, domestic distribution channels had not even been established
by 2008, and firms such as Ledman LED were forced to create markets
by working on government-led energy-saving projects or participating
in public construction supply chains. In light manufacturing industries,
such as apparel, the demand for these downstream capabilities helped to
drive the growth of platform firms such as Alibaba, which connect the
host of smaller manufacturers in China directly with potential markets
(Chapter 3).
For intersectoral upgrading, firms have leveraged existing technolog-
ical capabilities to upgrade into new emerging sectors as first movers. For
instance, BYD, traditionally a lithium battery supplier for consumer elec-
tronics firms, personal computer (PC) manufacturers, and mobile phone
makers, used this battery knowledge to jump-start its position in the
electric vehicle (EV) sector. Having entered the sector in 2003 with the
purchase of a small domestic car brand, BYD became a leading global EV
firm by 2020 with products in multiple end-market segments across the

globe, from passenger cars to electric-powered buses and trucks to even
trams for the public sector (Chapter 7). Likewise, component manufac-
turers serving the PC industries in Kunshan and Dongguan shifted their
output to serve the growing smart phone segment in order to survive
(Chapter 6). The reorientation of many of these suppliers would play a
major role in helping drive the rapid rise of China-produced smartphones
(Lee and Gereffi 2021).
Other firms focused on upgrading into higher value industries by
entering directly into high-tech value chains, including industrial robots,
medical devices, and information and communication technologies (ICT).
These firms serve the large Chinese domestic market. As with high-
tech and emerging GVCs around the world, new firms typically pursued
vertical integration strategies that allow for full control and coordination
across their supply chains. Upgrading is achieved through internal capa-
bilities in upstream components manufacturing and major investments in
R&D. Company cases include Estun (industrial robots), Huawei (ICT)
and Neusoft (high-tech medical devices), which focused on avoiding
dependence on foreign component imports and controlling their cost
competitiveness (Chapter 8). Estun and Neusoft’s R&D intensity (R&D
spending as a share of income) is similar to that of leading firms abroad
(PwC 2022).
In a variety of sectors, the rise of digital technologies has fostered func-
tional upgrading into high value services operations. Digital platforms,
both production and distribution, have risen rapidly in China serving
light and heavy manufacturing value chains alike. Distribution platforms,
such as Alibaba and Shein, provide extensive services in downstream e-
commerce and upstream product design and development (Chapter 3).
Others provided a similar service for product development in exchange
for a percentage of final sales (Chapter 7). In addition, a host of indus-
trial firms leveraged their pioneering experiences in digitalizing and
automating production to become services providers for platform-based
manufacturing (Chapters 2 and 10).
Upgrading from below in China has been driven by a combination of
factors.
First, local government policy is a major driver of change. While
broadly framed by the policies outlined by the central government, indus-
trial policy by local governments is key to upgrading success. This is
illustrated by the diverse range of business-government relationships in
different localities in the country. The role of the local state has become
considerably more proactive as states compete for investment and job
creation (He 2007). Local governments actively managed industrial poli-
cies, such as income tax breaks, rebates of value-added tax and import
duties for equipment purchases, low-priced land in special development
zones, and cash payments to firms based on exports and innovation
performance (Barbieri et al. 2012).
The rules of the game and objectives established by local govern-
ments influence the types of firms and investments that are attracted. For
example, clear rules regarding property rights, combined with a strong
FDI attraction unit and a commitment to public-private coalitions to
overcome potential barriers to growth positioned Kunshan as a key player
in PC manufacturing (see Chapters 5 and 6). Forming multistakeholder
coalitions at the local level that draw together firms and universities
with private and public research organizations are necessary to support
China’s goals to focus its GVC participation on indigenous innovation
(Chapters 8 and 10).
Regional differences in China also shape its development. Two of the
best-known cases of inter-regional competition for investment in China
involve the Pearl River Delta (PRD), which contains nine municipalities
under the jurisdiction of Guangdong province (including Guangzhou,
Shenzhen, Dongguan and Huizhou), and the Yangtze River Delta (YRD),
whose administrative sphere encompasses 16 cities in Jiangsu province
(such as the prefecture city of Suzhou and the county-level city of
Kunshan) and Zhejiang province (such as Hangzhou and Ningbo), as
well as the centrally governed municipality of Shanghai ((Yang 2009).
The PRD and YRD are prime examples of “globalizing” regional devel-
opment (Coe et al. 2004) because they compete intensely for FDI inflows
from both nearby Asian economies (such as Hong Kong, Taiwan, Singa-
pore, Japan and South Korea) as well as advanced Western economies.
In recent years, regional competition in China has extended to the inte-
rior provinces, such as Foxconn’s megafactories in “iPhone City” in
Zhengzhou, the capital city of Henan province, which are successfully
luring new investments in high-tech sectors like smartphones and cloud
computing because of rising costs and labor shortages in China’s coastal
provinces in the PRD and YRD (Barboza 2016).
Second, FDI has been a critical element in the upgrading of tech-
nological capabilities for export-oriented production. Through instru-
ments such as joint-venture requirements, FDI has created spillovers of
knowledge and technology into the local economy, including a network

of international contacts and the knowledge of how to produce for
foreign buyers. In 2015 alone, foreign companies set up more than
6,000 new joint ventures in China, accounting for $27.8 billion of FDI
(NBER 2018). For example, Taiwanese investment provided the main
impetus for capability development in China’s electronics sector. Through
entrepreneurship, former line workers from foreign factories set up their
own operations. Over half of the founders of Chinese manufacturing firms
in the electronics sectors started out as line workers in Taiwanese and
Hong Kong enterprises (Chapter 6). In the case of medical devices and
industrial robots, the presence of FDI from some of the world’s leading
firms, including robot manufacturers, FANUC and Yaskawa, provided a
different impetus; these firms forced local firms to produce higher quality
equipment to remain viable (Chapter 8).
However, the governance structures of these FDI-dominated chains
often prevented local suppliers from upgrading further. Lead-firm
management kept these suppliers separated from product design and
downstream customers, limiting their profit margins and potential growth
opportunities (Murphree and Breznitz 2020). As a result, many firms
opted for a dual strategy of maintaining some sales to foreign operations,
while diversifying downstream into new product segments and buyers in
the domestic and regional markets (Chapters 6 and 7).
Third, the rapidly growing domestic market has facilitated upgrading
into both upstream and downstream stages of the chain, particularly
after the change in regulations in 2008 that allowed export-oriented
firms to sell products on the domestic market. This proved critical for
enabling Chinese manufacturers to pivot away from exclusively foreign-
led GVCs where they were locked into the midstream positions in the
chain (Chapter 7). Manufacturers were able to leverage their consid-
erable production capabilities combined with their knowledge of local
consumer preferences to carve out local market share. Over time, China’s
large domestic demand allowed the local producers to grow and accu-
mulate capital, technologies, and experiences, and gradually upgrade
and provide innovative products of higher quality (Chapter 8). In the
mobile phone segment, for example, the domestic firms initially provided
slightly lower quality but much cheaper alternatives to foreign-produced
high-end phones, but later on, domestic firms made significant product
improvements and become internationally competitive (Gereffi et al.
2021a).
Forth, a small but growing focus on innovation at the firm level helped
drive upgrading into new high-tech industries. An emerging set of firms
within the country directly pursued R&D and innovation. R&D inten-
sity (the share of R&D spending to sales) was high—even by Western
standards—at firms such as Huawei (ICT), Neusoft (high-tech medical
devices), Estun (industrial robots) and Goodbaby (baby products). These
firms also tapped into foreign innovation hubs, either by establishing local
R&D centers or purchasing innovative foreign firms to gain access to
critical technologies for upgrading, such as Midea’s 2016 purchase of
Germany’s leading robot firm, Kuka (Chapter 2).
4.1 Implications of Upgrading from Above and Below for Human

Capital Development
As China upgraded along these multiple dimensions, there were new
opportunities and challenges for the labor force. During the export-
oriented stage of GVC engagement, on-the-job training was sufficient
for most workers to support process and product upgrading. Yet there
were concerns over poor working conditions and an unsustainable pace of
work. The 2008 Labor Laws began to require both social security benefits
and severance contributions for workers. This coincided with rising labor
costs to force Chinese firms to upgrade into higher value activities where
they could remain competitive.
The functional upgrading required to perform these higher value
activities also entails an increase in the skills need to carry out these
activities (Gereffi et al. 2011). The ability to do this at scale depends
on the widespread availability of workers and educational institutions to
undertake this skills development. Higher education in China has risen
significantly, with over half of young people gaining a higher education
degree (Chapter 10).
However, training the workforce for the digital economy that China
wishes to lead is just part of the challenge. Recruiting and retaining these
skilled digital workers has become a major difficulty globally. China’s
growth has brought big challenges for its high-tech sector. Despite objec-
tive gains in salaries and working conditions, it is not uncommon for
workers to be unsatisfied with their jobs (Chapter 4). Both globally and in
China, worker expectations for their quality of life have shifted as they rise
into more highly skilled jobs and the pandemic has only underscored these
concerns. In late 2021, Gartner estimated that approximately one-third
of IT workers in developed countries actively sought new jobs (Carnegie

2022). With strong demand for skilled workers around the world, reten-
tion is increasingly difficult; companies in China and aboard will need to
adjust how they recruit and retain their workforce.
5 Contributions of this Volume

The three sections of this book highlight China’s ambitious agenda and
uneven progress toward becoming an emerging superpower in the global
economy. In Part I, Chapters 2–4 outline the implications of China’s
new platform-based concepts of production, which push beyond the
cost-driven efficiencies and global economies of scale of its diversified
export-oriented industrialization model to confront the challenges and
opportunities of innovation-oriented development in the digital era of the
twenty-first century. In Part II, Chapters 5–8 challenge the paradigm of
top-down control by China’s central government, and instead reveal the
key role played by local industrial policy through Chinese city and provin-
cial governments and the growing participation of Chinese suppliers in
industries that increasingly serve China’s large domestic market. Finally,
in Part III, Chapters 9–10 document China’s shifting position within East
Asia’s regional value chains, but stress the considerable variation across
products and segments within value chains. Below is a brief note on each
chapter.
5.1 Part I: Digital Technologies and China’s New Development

Strategies
Central to China’s new development agenda is a heavy emphasis on
the digital economy. A key consequence of China’s reliance on the
digital economy is the emergence of platform-based manufacturing as a
business model that relies on the internet to transform the social and
economic hierarchies across key industrial sectors. China has become the
world’s largest and most diversified testing ground for new platform-
based concepts of production. At the national level, the Made in China
2025 program promoted this transition using a strategy for the Indus-
trial Internet of Things (IIoT). Although China has spawned numerous
IIoT pilot platforms in specific manufacturing industries and local clus-
ters (Chapter 2), large individual companies have also pioneered this
concept. E-commerce giant Alibaba’s distribution-centered platform tries
to restructure the subcontracting networks in China’s light industries such

as apparel (Chapter 3), while a dominant firm in the ICT sector has
attained firm-level upgrading through indigenous innovation, but this
leads to disjunctures between objective and subjective social upgrading
criteria for the firm’s highly skilled young tech workers (Chapter 4).
5.1.1 Chapter 2: China’s Industrial Internet: Platform-Based

Manufacturing and Restructuring of Value Chains (Boy
Lüthje)
The chapter provides a conceptual framework to understand the rapid
development of China’s IIoT strategy. It reviews both the top-down
Chinese policy approach to enhancing automation and digitalization of
production platforms within key manufacturing sectors, and the bottom-
up evolution of firms and other actors engaged in bringing this vision
to fruition. The author’s unique position as a German researcher with
long-standing ties to academic institutions within China affords him
insights into policy development that are often not visible to interna-
tional scholars. Lüthje debunks the notion that Chinese digitalization
policies are driven by creating large state-owned enterprises, and instead
highlights the diversity of business models and private sector actors that
promote these efforts at the production level.
5.1.2 Chapter 3: Alibaba’s Distribution-Driven Approach

Towards the Industrial Internet: A Chinese Approach
to Industry 4.0? (Lea Schneidemesser and Florian Butollo)
The authors of this chapter add to the framework proposed in Chapter 2
by analyzing the IIoT model of China’s largest e-commerce company,
Alibaba. In contrast to the production-centered approach of platform-
based manufacturing in the industrial internet, this chapter focuses
on Alibaba’s new distribution-centered model. Specifically, the authors
examine the case of Alibaba’s industrial internet platform, Tao-Factory.
They highlight how, by lowering transaction costs and improving the
flexibility of sourcing, Alibaba is restructuring the subcontracting arrange-
ments in China’s domestic light industries, but question whether the
positive effects of this system in expanding access by small producers in
China could be undercut by intense price competition and a race to the
bottom in the long run.
5.1.3 Chapter 4: Subjective Social Upgrading and Downgrading

of Technical Workers in China’s High-Tech Economy:
A Company Case Study (Xia Yan)
The author’s focus on the objective and subjective dimensions of the
social upgrading of workers at a leading Chinese ICT firm provides rare
insights into how the efforts of China’s high-tech firms to reach the
global technology frontier is viewed from a labor perspective. Techno-
logical upgrading in China places a premium on the need for highly
skilled workers, yet the author’s empirical research indicates that these
workers subjectively view their roles as having steadily deteriorated over
time despite unambiguous objective gains in terms of salaries, career
development, skill improvement, and benefits such as improved work
facilities. Using over 70 interviews with middle managers, human resource
personnel and other professionals, the chapter traces the evolution of
working conditions at the firm as it rose from a reseller of imported prod-
ucts to become a leading icon of China’s innovation and technological
progress. Yan’s findings have important implications for the retention and
recruitment of high-tech workers by other companies in China in terms
of tangible as well as non-tangible benefits.
5.2 Part II: Active Local Governments and Firm Upgrading

in China
With the growing success of China’s export-oriented development model
in the 1990s and 2000s, attention has shifted to the sectoral, regional,
and local context of industrial upgrading in the country. New empir-
ical research is providing a more variegated and nuanced picture of key
determinants and novel trajectories of China’s economic growth, relying
on both comparative and longitudinal analyses. The Pearl River Delta in
southern China and the Yangtze River Delta near Shanghai in the east
have displayed significant regional differences in the timing and sectoral
orientation of their export patterns, which is explored in this volume
through a series of detailed city and industry case studies. Cities like
Dongguan (in the PRD) and Kunshan (YRD) have emphasized the ICT
sector and active local governments in their export growth but show
divergent trends in the current period (Chapter 5). Taiwanese FDI played
a key role in the development of the PC industry in both Dongguan and
Kunshan, but the shift from export-led growth to the domestic market in
the 2010s has provided new opportunities for Chinese domestic suppliers
and weakened the position of Taiwanese firms in China (Chapter 6).

To identify and better understand diverse pathways for upgrading from
below by local manufacturing firms, it is useful to compare multiple
industries and company case studies within a single manufacturing hub
(Huizhou City in the PRD) to understand how firms climb technological
and market ladders in GVCs (Chapter 7). The same logic of comparing
advanced manufacturing sectors (industrial robots and high-tech medical
devices) as well as individual company cases also helps us understand the
varied impact of central government versus local government policies in
achieving industrial upgrading (Chapter 8).
5.2.1 Chapter 5: Active Local Governments and New Chinese

Firms in Emerging Industries in Kunshan and Dongguan
(Xun Zhang, Gary Gereffi, and CassandraWang)
This chapter analyzes China’s involvement in GVCs from the bottom up
rather than the top down. It contends that industrial policy in China is
not merely a tool of the central government, but that local governments
are also very important actors in the industrial landscape of China. Using
city-level case studies of Kunshan and Dongguan, the chapter highlights
different patterns in the evolution of active local governments in China,
which reflect both the timing of development and the regional location
of these industrial hubs. Kunshan, a county-level city in Jiangsu province,
fostered an evolutionary coalition at the onset of its industrial experi-
ence, but later it was able to use local Taiwanese investors to catapult
to a world leadership role in the laptop computer GVC. Dongguan, a
prefecture-level city and industrial cluster in central Guangdong Province,
China, started from a more generalized base in the highly manufacturing-
oriented Pearl River Delta (PRD). Its upgrading path led to greater
diversification in the information and communication technology (ICT)
sector and a local government that learned how to play a more active role
in nurturing local firms. Currently Dongguan may have the upper hand as
China shifts to a more inward-oriented development model that empha-
sizes industrial upgrading from below with Chinese suppliers joining local
supply chains oriented to the domestic market.
5.2.2 Chapter 6: Whither GVCs: The Shifting Role of Taiwanese

FDI in Mainland China (Michael Murphree)
The chapter highlights the evolving role of Taiwanese investments in
China’s entry and technological upgrading within manufacturing GVCs.
Initially these investments facilitated China’s entry into the informa-

tion technology (IT) GVC via the production of electronic components
and final-product assembly needed for export-oriented markets. In the
aftermath of the global financial crisis of 2007–2008, China’s position
in GVCs evolved with an increasingly important role for indigenous
firms as China diversified into high-technology sectors and advanced
manufacturing programs oriented to China’s large domestic market. The
overall decline in Taiwanese investment in China’s manufacturing sector
raises important challenges and opportunities for local suppliers, while
Taiwanese FDI in high-tech digital services has steadily increased over
the past 15 years.
5.2.3 Chapter 7: Industrial Upgrading from Below: Can Chinese

Local Manufacturing Firms Reconfigure GVCs? (Wei Zhao)
Based on empirical firm-level studies of three industrial sectors—LED
lights, mobile terminals, and new energy vehicle batteries—in the manu-
facturing region of the Pearl River Delta in China, the author identifies
the main traits of industrial upgrading that reconfigure, restructure,
and even create new sectors. Specifically, the chapter discusses distinct
upgrading trajectories followed by local firms in Huizhou City. In mature
industries with established governance patterns, it is very difficult for
Chinese suppliers to alter or reconfigure existing power structures or
capture higher value. In sectors such as mobile terminals, suppliers must
“sustain” process, product and market upgrading to remain competitive
within the chain. However, in emerging high-tech industries where gover-
nance dynamics remain highly fluid, Chinese firms that have been willing
to make significant market, technological and organizational changes can
establish themselves as global lead firms. The chapter supports this frame-
work with detailed case studies for three key firms in Huizhou City:
Huayang General in the mobile terminals sector, Ledman LED in the
LED sector, and BYD in the electric battery sector.
5.2.4 Chapter 8: Upgrading of Chinese Domestic Firms

in Advanced Manufacturing: Evidence from Industrial
Robots and High-Tech Medical Devices (Jing Zhao
and Gary Gereffi)
Based on diverse qualitative and quantitative evidence from two sectors—
industrial robots and high-tech medical devices—that were included in
both “Made in China 2025” and the 14th Five-Year Plan, this chapter
identifies and discusses the driving forces behind the upgrading trends
of Chinese domestic firms, including the national and local policies
supporting these upgrading efforts. Although moving up in advanced
manufacturing GVCs is China’s policy priority, very few empirical studies
analyze the success of this initiative in specific industries and with an
emphasis on firm-level characteristics, including ownership and market
orientation. This chapter fills this gap and thus contributes new insights
to discussions of GVC upgrading in China’s advanced manufacturing
sectors. The chapter includes case studies of two key firms—Estun in
the industrial robot sector and Neusoft Medical Systems in the high-tech
medical device GVC—examining their upgrading pathways and impact
within these emerging high-tech sectors.
5.3 Part III: China’s Shifting Role in Regional and Global Value
Chains
The rise of China and other emerging Asian economies transformed how
the Asian region was connected internally and externally, which under-
scores the need to highlight the dynamics of regional value chains (RVCs)
and not simply GVCs. In the electronics sector, intra-Asian trade grew
faster since 2007 than extra-regional trade, and intra-Asian trade linkages
are stronger in intermediate goods (electronics parts and components)
than final goods. At the country level, China has improved its position
significantly in the division of labor within Asia, but the centrality of
China is greater in finished goods trade than intermediate goods and is
much stronger for specific products like mobile phones (where China is
the world’s largest exporter) than for critical inputs like semiconductors
(Chapter 9). In looking at how China could accelerate the combination of
digital technology and traditional industries, various policy options have
been identified that prioritize digital platforms as a strategic sector and
target human resources and key domestic institutions to strengthen the
development of digital industrial value chains (Chapter 10).
5.3.1 Chapter 9: China’s Shifting Roles in Asian Electronics

Trade Networks: Implications for Regional Value Chains
(Joonkoo Lee)
This chapter examines the changing dynamics of Asian production
networks and China’s shifting position therein over the last decade
focusing on the electronics sector, which has been a centerpiece of East
Asia’s industrial growth. The chapter analyzes inter-regional and intra-

Asian trade networks, using international trade data from 2007 to 2018.
The analysis confirms the region’s rising importance in GVCs and high-
lights a shift in the division of labor between China and other Asian
countries across different products. Overall, the nexus of FDI, interna-
tional trade, and fragmented production has generated and strengthened
inter- and intra-regional connections and interaction in the Asian elec-
tronics industry. Although East Asia is the world factory of electronics
goods, the factory is run through a regional division of labor trading
parts and components among regional neighbors. This trade pattern
has been strengthened in the aftermath of the global economic crisis of
2007–2008.
5.3.2 Chapter 10: The Reconfiguration of GVCs in the Digital

Economy: Recent Trends and China’s New Agenda (Ying
Qiu)
The chapter examines how the reconfiguration of digital GVCs could
impact China’s role as the factory of the world. Drawing on input-output
tables and data on value-added trade as well as direct insights from firms,
the author argues that the digital economy threatens China’s role as a
manufacturer by encouraging the regionalization of production, while
at the same time creating new opportunities to foster upgrading into
high-technology sectors. These opportunities include China leveraging its
current role as a digital leader of Asian value chains as well as fostering its
digital capabilities and platforms to become a global services provider. The
chapter presents a series of policy recommendations to support China’s
potential upgrading path along these lines.
6 Conclusion
China’s role in GVCs has changed fundamentally. It is no longer aiming
to compete solely as an export platform or outsourcing destination for
low-priced and low-tech consumer goods. Instead, China now seeks to
become a leader in high-technology sectors linked to advanced manu-
facturing, cloud computing, artificial intelligence, electric vehicles, and
new e-commerce and internet-related production networks, while less-
ening its dependence on the U.S. and other traditional export markets by
focusing on its domestic market and emerging regional markets. China’s
size, ambitious national goals, and growing technological capabilities
have permitted it to enter new and innovation-oriented industries in the

global economy very rapidly and in dramatic fashion while continuing
to leverage its production dominance in traditional industries to move
to higher-value upstream (R&D, design) and downstream (own brands)
activities in GVCs.
What China has achieved, and aspires to, is now clear. Less well
understood is how China has managed this dramatic transformation.
This volume seeks to answer that question by introducing the distinc-
tion between two types of drivers of China’s development trajectory:
upgrading from above and upgrading from below. The upgrading from
above category includes the relatively familiar set of programs introduced
by China’s central government through its major reforms and Five-Year
Plans that chart strategic shifts and new goals for the economy as a
whole. However, this top-down view of China’s development strategies is
only part of the story. Perhaps equally significant but less appreciated are
the diverse set of local policies and firm-level activities that are required
to implement and institutionalize these national programs and policy
directives. Collectively these actors and actions are what we refer to as
ungrading from below. In illustrating how upgrading from below works in
different industries and places, the chapters of this book reveal the forces
that simultaneously create dynamism and uneven development in China.
More generally, the competition among local governments to implement
China’s national plans and the interplay between foreign investors and
domestic Chinese suppliers in the process of building new industries and
local industrial capabilities show that China’s economy is not simply the
product of a master plan issued by the central government. The keys to its
success are the intense competitive forces that play out at the provincial,
regional, and municipal levels in China.
The Chinese model revealed in this book has important implications
for other countries as well. As China moves up to higher-value activi-
ties and new industries in the global economy, this creates opportunities
for developing economies to enter lower-value sectors and activities in the
export-oriented GVCs that China is de-emphasizing. An important corol-
lary is that being economically competitive is no longer sufficient for GVC
success. Greater attention needs to be given to social and environmental
upgrading objectives as a complement to economic upgrading.
Finally, the supply-chain vulnerabilities revealed by the COVID-19
global pandemic have not disappeared. Indeed, the search for options
to create more resilient supply chains will only intensify. For many coun-
tries including the United States, there is a great pressure to make supply
chains more domestic through reshoring production or building national
stockpiles of essential products. Other options include making supply
chains shorter (e.g., through nearshoring or strengthening regional value
chains) as well as making supply chains more diversified (e.g., by reducing
dependence on dominant foreign suppliers such as China, or by seeking
strategic partnerships with trusted suppliers in different regions of the
world). Given the many advantages of international production, sourcing,
and innovation networks, we are unlikely to see a full-scale retreat from
globalization. But various forms of re-globalization or reorganizing GVCs
are likely, and China’s evolving role in the global economy will continue
to shape the decisions of policymakers and businesses around the world.
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"But oh! Remember, if there is no room for Christ in your heart, there will be no room
for you in Christ's heaven."
"My friend, He is knocking now; it may be His last knock. He is calling now; it may be
His last call."
"'Oh, let Me in.'" He cries, "'and I will make you happy; I am bringing you forgiveness,
and peace, and joy, and rest, and all that you need. Oh, let Me in before it is too late! I
have waited so patiently and so long, and still I wait. Will you not, even this night, undo
the door?'"
When the little service was over the people went back into their houses, and Angel and
her mother went on with their work. And as Angel wiped the cups and saucers, she
sang softly to herself the chorus of the hymn—
"Oh! My soul, for such a wonder,

Wilt thou not undo the door?"
"Yes, I will!" said her mother suddenly, bursting into tears; "I will undo the door; I will
keep Him waiting no longer."
CHAPTER V
ANGEL'S BIRTHDAY
IT was a bright, sunny morning, some weeks after that little service was held in
Pleasant Place.
The sunbeams were streaming in at Mrs. Blyth's window, for the cobwebs and spiders
had some time ago received notice to quit, and the dust had all been cleared away, and
found no chance of returning.
Mrs. Blyth was a different woman. Her troubles and trials remained, and she had just as
much to do, and just as many children to look after, but she herself was quite different.
She had opened the door of her heart, and the Lord Jesus had come in. And He had
brought sunshine with Him into that dark and ignorant heart. Life, instead of being a
burden and a weariness, was now full of interest to Mrs. Blyth, because she was trying
to do every little thing to please Jesus, who had done so much for her. Whether she was
washing the children, or cleaning the house, or turning the mangle, she tried to do it all
to please Him. She remembered that He was looking at her, and that He would be
pleased if she did it well. It was wonderful how that thought helped her, and how it
made the work easy and pleasant.
So, through the bright, clean window, the morning sunbeams were streaming on little
Angel's head. Her mother was standing by her side, watching her as she lay asleep, and
waiting for her to awake.
As soon as ever Angel opened her eyes, her mother said—
"Little Angel, do you know what to-day is?"
"No, mother," said Angel, rubbing her eyes, and sitting up in bed.
"It's your birthday, Angel; it is indeed!" said her mother. "I hunted it out in your
grandmother's old Bible. It's the day you were born, just seven years ago!"
"And am I really going to have a birthday, mother?" said Angel, in a very astonished
voice.
"Yes, a real good birthday," said her mother; "so get up and come downstairs, before
any of it is gone."
Angel was not long in putting on her clothes and coming down. She found the table put
quite ready for breakfast, with a clean tablecloth, and the mugs and plates set in order
for her and her little brothers and sisters; and in a little jar in the middle of the table
was a beautiful bunch of flowers. Real country flowers they were, evidently gathered
from some pleasant cottage garden far away. There were stocks and mignonette, and
southernwood, and sweetbrier, and a number of other flowers, the names of which
neither Angel nor her mother knew.
"Oh mother, mother," said little Angel, "what a beautiful nosegay!"
"It's for you, Angel," said her mother: "for your birthday. I got it at the early market.
My father always gave me a posy on my birthday."
"Oh, mother," said little Angel, "is it really for me?"
But that was not all, for by the side of Angel's plate she found a parcel. It was tied up in
brown paper, and there was a thick piece of string round it, fastened tightly in so many
knots that it took Angel a long time to open it. Her little hands quite shook with
excitement when at last she took off the cover and looked inside. It was a little book, in
a plain black binding.
"Oh, mother," said Angel, "what is it? Is it for my birthday?"
"Yes," said her mother; "look at the writing at the beginning. I'll read it to you."
It was very uneven writing, and very much blotted, for Mrs. Blyth was only a poor
scholar; but little Angel did not notice this—it seemed very wonderful to her to be able
to write at all.
Now, what was written in the little book was this:
"Given to little Angel by her dear mother; and she hopes she will promise to read it, and
will keep her promise better than I did."
"But I can't read, mother," said Angel.

"No; but you must learn," said her mother. "I mean that you shall go to school regular
now, Angel. Why, you're seven years old to-day!"
Poor little Angel's head was nearly turned; it was such a wonderful thing to have a
birthday.
But the wonders of the day were not over yet; for when, after breakfast, Angel asked
for the clothes to mangle, her mother said: "They're all done Angel; I'm just going to
take them home. I've done a lot these three nights when you was in bed, that we might
have a bit of a holiday to-day."
"A holiday, mother!" said Angel. "Oh, how nice! No mangling all day!"
"No mangling all day," repeated the mother, as if the thought were as pleasant to her as
to Angel.
But the wonders of the day were not yet over.
"Angel," said her mother, as they were washing the children, "did you ever see the
sea?"
"No, mother," said Angel; "but Tim has; he went last Easter Monday with his uncle."
"Well," said her mother, "if it doesn't rain, you shall see it to-day."
"Oh, mother!" was all that little Angel could say. And who do you think is going to take
you, child? "I don't know, mother."
"Why, Angel, your father is. He came in last night as soon as you'd gone to bed. He sat
down in that arm-chair by the fire, and he said, 'Dear me! how comfortable things is
just now at home! If they was always like this, I wouldn't stop out of an evening.'"
"So I said, 'If God helps me, John, they always shall be like this, and a deal better, too,
when the children gets a bit bigger.' And your father stopped at home and read his
newspaper, Angel, and then we had a bit of supper together. It was like when we was
first married, child; and as we ate our supper, Angel, I said, 'It's Angel's birthday to-
morrow, John.' And your father said, 'Is it? Why, to-morrow's Saturday. Let's all go to
the sea together;' and he took quite a handful of shillings out of his pocket. 'Here's
enough to pay,' he said. 'Have them all ready at dinner-time, and we'll go by the one-
o'clock train.'"
"Oh, mother," said little Angel, "it is so nice to have a birthday!"
True to his promise, John Blyth came home at dinner-time, with the shillings still in his
pocket. His mates had tried hard to persuade him to turn into the Blue Dragon on his
way home, but he told them he had an engagement, and had no time to stay.
What a happy afternoon that was!
Angel had never been in a train before, and her father took her on his knee, pointing
out to her the houses, and trees, and fields, and sheep, and cows, and horses, as they
went by. And then they arrived at the sea, and oh! What a great, wonderful sea it
seemed to Angel! She and her little brothers and sisters made houses in the sand, and
took off their shoes and stockings and waded in the water, and picked up quite a
basketful of all kinds of beautiful shells; whilst her father and mother sat, with the baby,
under the shadow of the cliffs and watched them.
And then they all came home together to tea, and her father never went out again that
night, but sat with them by the fire, and told Angel stories till it was time to go to bed.
"Oh, mother," said Angel again, a sleepy head on the pillow, "it is nice to have a
birthday!"
CHAPTER VI
THE GREAT BIRTHDAY
THE bells were ringing merrily from the tower of the old church close to Pleasant Place.
The street near the church was full of people bustling to and fro, going in and out of the
different shops, and hurrying along as if none of them had any time to lose. The shops
were unusually gay and tempting, for it was Christmas Eve. Even Pleasant Place looked
a little less dull than usual. There were sprigs of holly in some of the windows, and most
of the houses were a little cleaner and brighter than usual.
Angel and her mother had been very busy all day. They had just finished their
mangling, and had put all the clothes out of the way for Christmas Day, when they
heard a knock at the door, and Angel went to open it.
"It's a basket, mother," she said. "It can't be for us."
The man who had brought the basket laughed.
"It's for an Angel!" he said. "Have you got any of that article in here? Here's the
direction I was to bring it to—'Little Angel, No. 9, Pleasant Place.'"
"Then, please, it's for me," said Angel.
"For you!" said the man. "Well, to be sure! So you are the angel, are you? All right,
here's your basket!" And he was gone before they could ask more.
The basket was opened with some difficulty, for it was tightly tied up, and then Angel
and her mother put out the contents on the table amidst many exclamations.
There was first a plum-pudding, then a number of oranges and apples, then a large
cake, and then a pretty Christmas card, with a picture of a robin hopping about in the
snow, and these words printed on it, "A Happy Christmas to you all."
"Where can they all have come from?" said little Angel, as one good thing after another
came out of the basket. At the very bottom of the basket they found a tiny note.
"This will tell us about it," said Mrs. Blyth. "Why, it's directed to you, Angel!"
So Angel's mother sat down, stirred the fire, spelt it carefully out, and read it aloud by
the firelight.
"MY DEAR LITTLE ANGEL,"

"I send you a few little things for Christmas
Day. I hope you will have a very happy day. Do not
forget whose Birthday it is. Your friend,"
"MABEL DOUGLAS."
"Whose birthday is it, mother?" asked little Angel.
"The Lord Jesus Christ's," said her mother reverently. "Did I never tell you that, little
Angel? It's the day we think about Him being born a little baby at Bethlehem."
"SO YOU ARE THE ANGEL, ARE YOU? HERE'S YOUR BASKET."
Angel was sitting on her stool in front of the fire thinking, and it was some time before
she spoke again. Then she said suddenly, "What are you going to give Him, mother?"
"Give who, Angel?"
"What are you going to give the Lord Jesus for His birthday?"
"Oh, I don't know," said her mother. "I don't see how we can give Him anything."
"No," said little Angel sadly; "I've only got one penny,—that wouldn't buy anything good
enough. I would have liked to give Him something on His birthday; He did such a lot for
us."
"We can try to please Him, Angel," said her mother, "and do everything that we think
He would like."
"Yes," said little Angel, "we must try all day long."
That was a very happy Christmas Day for Angel and for her mother.
"This is the Lord Jesus' birthday," was Angel's first thought when she awoke in the
morning; and all through the day she was asking herself this question, "What would
Jesus like?" And whatever she thought He would like that she tried to do.
Angel's father was at home to dinner, and was very kind to her all day. He had not been
seen inside a public-house since Angel's birthday. It was a very good little Christmas
dinner. As they were eating it, Mr. Blyth said:
"Emily, have you seen those bills on the wall at the top of the court?"
Angel's mother said, "No; I have not been out to-day."
"There's to be a meeting to-night in that little schoolroom just a bit of way down the
street. That new young minister's going to speak; and it says on the bills it will all be
over in half an hour. I've a good mind to go and hear what he's got to say. Will you
come with me?"
"Yes, that I will," said Mrs. Blyth, with tears in her eyes. She had not been inside a
place of worship with her husband since the first year they were married.
"Can't Angel come too?" said her father, as he looked at her earnest little face.
"Not very well," said Mrs. Blyth; "we can't all go. Some one must stop with baby and
the children."
When Angel's large plum-pudding was put on the table, a sudden thought seized her.
"Mother," she whispered, "don't you think Jesus would like poor old Mrs. Sawyer to have
a bit of it?"
"Yes," said Mrs. Blyth, "I'll cut her a slice, and one for Annie too, poor girl. Will you take
them in?"
So Angel went next door with her two slices of plum-pudding. She found Mrs. Sawyer
and her niece Annie just beginning their dinner. There was nothing on the table but
some tea, and a loaf of bread with a few currants in it, so Angel felt very glad she had
brought the pudding. She was sure Jesus would be pleased they should have it; and she
thought it would make Him glad on His birthday to see how Mrs. Sawyer and Annie
smiled when they saw what she had brought them.
"Are you going to this meeting to-night?" said Annie, as Angel turned to go.
"No, I'm not going," said Angel; "but father and mother are. I must mind the children."
"I'll tell you what," said Annie; "if you'll bring them in here, I'll mind them. I can't leave
aunt, and they'll be a bit of company for her."
And so it came to pass that Pleasant Place beheld the wonderful sight of Mr. and Mrs.
Blyth and Angel all going together to the little meeting in the schoolroom.
A good many Pleasant Place people were there; and they looked round in astonishment
as Mr. Blyth came in, for they thought him about the most unlikely man in the whole
court to be there. And his wife and little Angel, as they sat beside him, prayed very
earnestly that he might get a blessing.
Mr. Douglas's text was a very strange one for Christmas Day—at least, so many of the
people thought when he gave it out. It had only four words, so that even little Angel
could remember it quite well—
"GIVE ME THINE HEART."
"Suppose," said the minister, "it was my birthday, and every one in my house was
keeping it. They all had a holiday and went out into the country, and there was a very
good dinner, which they all very much enjoyed, and altogether it was a very pleasant
day to them indeed."
"But suppose that I, whose birthday it was, was quite left out of it. No one gave me a
single present; no one even spoke to me; no one took the slightest notice of me. In
fact, all day long I was quite forgotten; I never once came into their thoughts."
"Nay, more. Not only did they do nothing whatever to give me pleasure, but they
seemed all day long to take a delight in doing the very things which they knew grieved
me and pained me, and were distressing to me."
"Surely, my friends, that would be a strange way of keeping my birthday; surely I

should feel very hurt by such conduct; surely it would be a perfect sham to pretend to
be keeping my birthday, and yet not take the slightest notice of me, except to annoy
and wound me! My friends," said the minister, "this afternoon I took a walk. In the
course of my walk I saw a number of people who pretended to be keeping a birthday.
And yet what were a great many of them doing? They were eating and drinking and
enjoying themselves, and having a merry time of it."
"But I noticed that the One whose birthday it was, was quite forgotten: they had not
given Him one single present all day long they had never once spoken to Him; all day
long He had never been in their thoughts; all day long He had been completely and
entirely passed by and forgotten."
"Nor was this all. I saw some who seemed to be taking a pleasure in doing the very
things He does not like, the very things which offend and grieve Him—drinking and
quarrelling, and taking His holy name in vain."
"And yet all these, my friends, pretended to be keeping the Lord Jesus Christ's
birthday!"
"But, I trust, by seeing you here to-night, that you have not been amongst their
number. I would therefore only put to you this one question—"
"The Lord Jesus Christ's birthday! Have you made Him a present to-day?"
"A present!" you say. "What can I give Him? He is the King of kings and Lord of lords.
What have I that is fit for a present to a king?"
"Give Him what He asks for, my friends. He says to you to-night, 'Give Me thine heart.'"
"That is the birthday present He is looking for. Will you hold it back?"
"Oh, think of what we are commemorating to-day. Think how He left His glory, and
came to be a poor, helpless babe for you; think, my friends, of all His wonderful love to
you. And then I would ask you, Can you refuse Him what He asks? Can you say—"
"Lord, I cannot give Thee my heart. I will give it to the world, to pleasure, to sin, to
Satan, but not to Thee,—no, not to Thee. I have no birthday present for Thee to-night?"
"Oh, will you not rather say—"
"'Lord, here is my heart; I bring it to Thee; take it for Thine own.

Cleanse it in Thy blood; make it fit to be Thine'"?
"Will you not this night lay at your King's feet the only birthday present you can give
Him—the only one He asks for—your heart?"
"Mother," said little Angel, as they walked home, "we can give Him a present, after all."
It was her father who answered her.
"Yes, Angel," he said, in a husky voice; "and we mustn't let Christmas Day pass before
we have done it."
And that night amongst the angels in heaven there was joy—joy over one sinner who
repented of the evil of his way, and laid at his Lord's feet a birthday present, even his
heart.
There was joy amongst the angels in heaven; and a little Angel on earth shared in their
joy.
"PLEASE, MR. SOLEMN, WHEN YOU DIE,
WHO'LL HAVE TO DIG YOUR GRAVE?"
LITTLE DOT
CHAPTER I
OLD SOLOMON'S VISITOR
IT was a bright morning in spring, and the cemetery on the outskirts of the town looked
more peaceful, if possible, than it usually did. The dew was still on the grass, for it was
not yet nine o'clock. The violets and snowdrops on little children's graves were peeping
above the soil, and speaking of the resurrection. The robins were singing their sweetest
songs on the top of mossy gravestones—happy in the stillness of the place. And the
sunbeams were busy everywhere, sunning the flowers, lighting up the dewdrops, and
making everything glad and pleasant. Some of them even found their way into the deep
grave in which Solomon Whitaker, the old grave-digger, was working, and they made it
a little less dismal, and not quite so dark.
Not that old Whitaker thought it either dismal or dark. He had been a grave-digger
nearly all his life, so he looked upon grave-digging as his vocation, and thought it, on
the whole, more pleasant employment than that of most of his neighbours.
It was very quiet in the cemetery at all times, but especially in the early morning; and
the old man was not a little startled by hearing a very small voice speaking to him from
the top of the grave.
"What are you doing down there, old man?" said the little voice.
The grave-digger looked up quickly, and there, far above him, and peeping cautiously
into the grave, was a child in a clean white pinafore, and with a quantity of dark brown
hair hanging over her shoulders.
"Whoever in the world are you?" was his first question.
His voice sounded very awful, coming as it did out of the deep grave, and the child ran
away, and disappeared as suddenly as she had come.
Solomon looked up several times afterwards as he threw up fresh spadefuls of earth,

but for some time he saw no more of his little visitor. But she was not far away; she
was hiding behind a high tombstone, and in a few minutes she took courage, and went
again to the top of the grave. This time she did not speak, but stood with her finger in
her mouth, looking shyly down upon him, as her long brown hair blew wildly about in
the breeze.
Solomon thought he had never seen such a pretty little thing. He had had a little girl
once, and though she had been dead more than thirty years, he had not quite forgotten
her.
"What do they call you, my little dear?" said he, as gently as his husky old voice would
let him say it.
"Dot," said the child, nodding her head at him from the top of the grave.
"That's a very funny name," said Solomon. "I can't think on that I ever heard it afore."
"Dot isn't my real name; they call me Ruth in my father's big Bible on our parlour
table."
"That's got nothing to do with Dot as I can see," said the grave-digger musingly.
"No," she said, shaking her long brown hair out of her eyes; "it's 'cause I'm such a little
dot of a thing that they call me Dot."
"Oh, that's it, is it?" said Solomon; and then he went into a deep meditation on names,
and called to mind some strange ones which he read on the old churchyard
gravestones.
When Solomon was in one of his "reverdies," as his old wife used to call them when she
was alive, he seldom took much notice of what was going on around him, and he had
almost forgotten the little girl, when she said suddenly, in a half-frightened voice—
"I wonder what they call you, old man?"

"Solomon," said the grave-digger; "Mr. Solomon Whitaker—that's my name."
"Then, please, Mr. Solemn, what are you doing down there?"
"I'm digging a grave," said Solomon.
"What's it for, please, Mr. Solemn?" asked the child.
"Why, to bury folks in, of course," said the old man.
Little Dot retreated several steps when she heard this, as if she were afraid Mr. Solomon
might want to bury her. When he looked up again there was only a corner of her white
pinafore in sight. But as he went on quietly with his work, and took no notice of her, Dot
thought she might venture near again, for she wanted to ask Mr. Solomon another
question.
"Please," she began, "who are you going to put in that there hole?"
"It's a man as fell down dead last week. He was a hard-working fellow, that he was,"
said the grave-digger; for he always liked to give people a good word when digging
their graves.
Dot now seemed satisfied; and, on her side, told the old man that she had come to live
in one of the small cottages near the cemetery gates, and that they used to be "ever so
far off" in the country.
Then she ran away to another part of the cemetery, and old Solomon shaded his eyes
with his hand to watch her out of sight.
CHAPTER II
DOT'S DAISIES
DOT'S mother had lived all her life in a remote part of Yorkshire, far away from church
or chapel or any kind of school. But her husband had been born and brought up in a
town, and country life did not suit him. And so, when Dot was about five years old, he
returned to his native place, and took one of the cottages close to the cemetery, in
order that his little girl might still have some green grass on which to run about, and
might still see a few spring flowers.
The cemetery was some way out of the town; and Dot's mother, having had but little
education herself, did not think it at all necessary that Dot, at her tender age, should go
to school, and therefore the little girl was allowed to spend most of her time in the
cemetery, with which she was very well pleased. She liked to run round the
gravestones, and climb over the grassy mounds, and watch the robins hopping from
tree to tree.
But Dot's favourite place was by old Solomon's side. She went about with him from one
part of the cemetery to another, and he liked to feel her tiny hand in his. She took a
great interest, too, in the graves he was digging. She watched him shaping them neatly
and making them tidy, as he called it, until she began, as she fancied, to understand
grave-digging nearly as well as he did. But she sometimes puzzled the old man by her
questions, for Dot always wanted to know everything about what she saw.
"Mr. Solemn," she said one day, "shall you make me a little grave when I die?"
"Yes," he said, "I suppose I shall, little woman."
Dot thought this over for a long time.
"I don't want to go into a grave," she said; "it doesn't look nice."
"No," said the grave-digger, "you needn't be frightened; you won't have to go just yet.
Why, you're ever such a little mite of a thing!"
"Please, Mr. Solemn, when you die, who'll have to dig your grave, please?"
"I don't know," said Solomon uneasily; "they'll have to get a new digger, I suppose."
"Maybe you'd better dig one ready when you've a bit of time, Mr. Solemn."
But though Solomon was very fond of digging other people's graves—for he was so
much used to it that it had become quite a pleasure to him—he had no wish to dig his
own, nor did he like thinking about it, though Dot seemed as if she would not let him
forget it.
Another day, when he was working in a distant part of the cemetery, she asked him—
"Whereabouts will they bury you, Mr. Solemn?"
And when they were standing over a newly made grave, and Solomon was admiring his
work, she said—
"I hope they will make your grave neat, Mr. Solemn."
But though these questions and remarks made old Whitaker very uneasy—for he had a
sort of uncomfortable feeling in his heart when he thought of the day when his grave-
digging would come to an end—still, for all that, he liked little Dot, and he would have
missed the child much if anything had kept her from his side. She took such an interest
in his graves, too, and watched them growing deeper and deeper with as much pleasure
as he did himself. And, whether we be rich or poor, high or low, interest in our work
generally wins our hearts. And by and by Dot found herself a way, as she thought, of
helping old Solomon to make his graves look nice.
He was working one day at the bottom of a grave, and Dot was sitting on the grass at a
little distance. He thought she was busy with her doll, for she had not been talking to
him for a long time, and he gave a jump as he suddenly felt something patting on his
head, and heard Dot's merry little laugh at the top of the grave. She had filled her
pinafore with daisies, and thrown them upon him in the deep grave.
"Whatever in the world is that for?" said the old man, good-naturedly, as he shook the
flowers off his head.
"It's to make it pretty," said Dot. "It'll make it white and soft, you know, Mr. Solemn."
Solomon submitted very patiently; and from that time the child always gathered daisies
to scatter at the bottom of Solomon's graves, till he began to look upon it as a
necessary finish to his work. He often thought Dot was like a daisy herself, so fresh and
bright she was. He wondered at himself when he reckoned how much he loved her. For
his own little girl had been dead so many years; and it was so long now since he had
dug his old wife's grave, that Solomon had almost forgotten how to love. He had had no
one since to care for him, and he had cared for no one.
But little Dot had crept into his old heart unawares.
CHAPTER III
THE LITTLE GRAVE
OLD Solomon was digging a grave one day in a very quiet corner of the cemetery. Dot
was with him, as usual, prattling away in her pretty childish way.
"It's a tidy grave, is this," remarked the old man, as he smoothed the sides with his
spade; "nice and dry too; it'll do me credit."
"It's a very little one," said Dot.
"Yes, it's like to be little when it's for a little girl; you wouldn't want a very big grave,
Dot."
"No," said Dot; "but you would want a good big one, wouldn't you, Mr. Solemn?"
The mention of his own grave always made Solomon go into one of his "reverdies." But
he was recalled by Dot's asking quickly—
"Mr. Solemn, is she a very little girl?"
"Yes," said the old man; "maybe about your size, Dot. Her pa came about the grave. I
was in the office when he called, 'and,' said he, 'I want a nice quiet little corner, for it is
for my little girl.'"
"Did he look sorry?" said Dot.
"Yes," he said; "folks mostly do look sorry when they come about graves."
Dot had never watched the digging of a grave with so much interest as she did that of
this little girl. She never left Solomon's side, not even to play with her doll. She was
very quiet, too, as she stood with her large eyes wide open, watching all his
movements. He wondered what had come over her, and he looked up several times
rather anxiously as he threw up the spadefuls of earth.
"Mr. Solemn," she said, when he had finished, "when will they put the little girl in?"
"To-morrow morning," said the old man, "somewhere about eleven."
Dot nodded her head, and made up her mind she would be in this corner of the
cemetery at eleven o'clock.
When Solomon came back from his dinner, and went to take a last look at the little
grave, he found the bottom of it covered with white daisies which Dot had thrown in.
"She has made it pretty, bless her!" he murmured.
Dot crept behind the bushes near the chapel the next day, to watch the little girl's
funeral arrive. She saw the small coffin taken from the hearse, and carried on in front.
Then she watched the people get out of the carriages, and a lady and gentleman, whom
she felt sure were the little girl's father and mother, walked on first. The lady had her
handkerchief to her eyes, and Dot could see that she was crying. After her walked two
little girls, and they were crying also.
There were a few other people at the funeral, but Dot did not care to look at them; she
wanted to see what became of the little girl's coffin, which had just been carried into
the chapel. She waited patiently till they brought it out, and then she followed the
mournful procession at a little distance, till they reached the corner of the cemetery
where Solomon had dug the grave.
Solomon was there, standing by the grave, when the bearers came up with the coffin.
Dot could see him quite well, and she could see the minister standing at the end of the
grave, and all the people in a circle round it. She did not like to go very near, but she
could hear the minister reading something in a very solemn voice, and then the coffin
was let down into the grave. The little girl's mamma cried very much, and Dot cried too,
she felt so sorry for her.
When the service was over, they all looked into the grave, and then they walked away.
Dot ran up as soon as they were gone, and, taking hold of Solomon's hand, she peeped
into the grave. The little coffin was at the bottom, and some of Dot's daisies were lying
round it.
"Is the little girl inside there?" said Dot in an awestruck voice.
"Yes," said Solomon, "she's in there, poor thing. I'll have to fill it up now."
"Isn't it very dark?" said Dot.
"Isn't what dark?"
"In there," said Dot. "Isn't it very dark and cold for the poor little girl?"
"Oh, I don't know that," said Solomon. "I don't suppose folks feels cold when they are
dead; anyhow, we must cover her up warm."
But poor Dot's heart was very full; and, sitting on the grass beside the little girl's grave,
she began to cry and sob as if her heart would break.
"Don't cry, Dot," said the old man; "maybe the little girl knows nothing about it—maybe
she's asleep like."
But Dot's tears only flowed the faster. For she felt sure if the little girl were asleep, and
knew nothing about it, as old Solomon said, she would be waking up some day, and
then how dreadful it would be for her.
"Come, Dot," said Solomon at last, "I must fill it up."
Then Dot jumped up hastily. "Please, Mr. Solemn, wait one minute," she cried, as she
disappeared amongst the bushes.
"Whatever is she up to now?" said the old grave-digger.
She soon came back with her pinafore full of daisies. She had been gathering them all
the morning, and had hid them in a shady place under the trees. Then, with a little sob,
she threw them into the deep grave, and watched them fall on the little coffin. After this
she watched Solomon finish his work, and did not go home till the little girl's grave was
made, as old Solomon said, "all right and comfortable."
CHAPTER IV
LILIAN AND HER WORDS
DOT took a very great interest in "her little girl's grave," as she called it. She was up
early the next morning; and as soon as her mother had washed her, and given her her
breakfast, she ran to the quiet corner in the cemetery to look at the new-made grave. It
looked very bare, Dot thought, and she ran away to gather a number of daisies to
spread upon the top of it. She covered it as well as she could with them, and she patted
the sides of the grave with her little hands, to make it more smooth and tidy. Dot
wondered if the little girl knew what she was doing, and if it made her any happier to
know there were daisies above her.
She thought she would ask Solomon; so when she had finished she went in search of
him. He was not far away, and she begged him to come and look at what she had done
to her little girl's grave. He took hold of Dot's hand, and she led him to the place.
"See, Mr. Solemn," she said, "haven't I made my little girl pretty?"
"Aye," he answered; "you have found a many daisies, Dot."

"But, Mr. Solemn," asked Dot anxiously, "do you think she knows?"
"Why, Dot, I don't know—maybe she does," he said, for he did not like to disappoint
her.
"Mr. Solemn, shall I put you some daisies at the top of your grave?" said Dot, as they
walked away.
Solomon made no answer. Dot had reminded him so often of his own grave, that he had
sometimes begun to think about it, and to wonder how long it would be before it would
have to be made. He had a vague idea that when he was buried, he would not come to
an end.
He had heard of heaven and of hell; and though he had never thought much about
either of them, he had a kind of feeling that some day he must go to one or other. Hell,
he had heard, was for bad people, and heaven for good ones; and though Solomon tried
to persuade himself that he belonged to the latter class, he could not quite come to that
opinion. There was something in his heart which told him all was not right with him, and
made the subject an unpleasant one. He wished Dot would let it drop, and not talk to
him any more about it; and then he went into a reverie about Dot, and Dot's daisies,
and all her pretty ways.
It was the afternoon of the same day, and Dot was sitting beside her little girl's grave,
trying to make the daisies look more pretty by putting some leaves among them, when
she heard footsteps crossing the broad gravel path. She jumped up, and peeped behind
the trees to see who was coming. It was the lady and gentleman whom she had seen at
the funeral, and they were coming to look at their little grave. Dot felt very shy, but she
could not run away without meeting them, so she hid behind a hawthorn bush at the
other side.
The little girl's papa and mamma came close to the grave, and Dot was so near that, as
they knelt down beside it, she could hear a great deal of what they were saying. The
lady was crying very much, and for some time she did not speak. But the gentleman
said—
"I wonder who has put those flowers here, my dear; how very pretty they are!"
"Yes," said the lady, through her tears; "and the grave was full of them yesterday."
"How pleased our little girl would have been!" said he. "She was so fond of daisies! Who
can have done it?"
Little Dot heard all this from her hiding-place, and she felt very pleased that she had
made her little girl's grave so pretty.
The lady cried a great deal as she sat by the grave; but just before they left, Dot heard
the gentleman say—
"Don't cry, dearest; remember what our little Lilian said the night before she died."
"Yes," said the lady, "I will not forget."
And she dried her eyes, and Dot thought she tried to smile as she looked up at the blue
sky. Then she took a bunch of white violets which she had brought with her, and put
them in the middle of the grave, but she did not move any of Dot's daisies, at which she
looked very lovingly and tenderly.
As soon as they were gone, Dot came out from behind the hawthorn bush. She went up
to her little girl's grave, and kneeling on the grass beside it she smelt the white violets
and stroked them with her tiny hand. They made it look so much nicer, she thought; but
she felt very glad that the lady had liked her daisies. She would gather some fresh ones
to-morrow.
Dot walked home very slowly. She had so much to think over. She knew her little girl's
name now, and that she was fond of daisies. She would not forget that. Dot felt very
sorry for the poor lady; she wished she could tell her so. And then she began to wonder
what it was that her little girl had said the night before she died. It must be something
nice, Dot thought, to make the lady wipe her eyes and try to smile. Perhaps the little
girl had said she did not mind being put into the dark hole. Dot thought it could hardly
be that, for she felt sure she would mind it very much indeed. Dot was sure she would
be very frightened if she had to die, and old Solomon had to dig a grave for her. No, it
could not be that which Lilian had said. Perhaps Solomon was right, and the little girl
was asleep. If so, Dot hoped it would be a long, long time before she woke up again.
Solomon had left his work, or Dot would have told him about what she had seen. But it
was tea-time now, and she must go home. Her mother was standing at the door looking
out for her, and she called to the child to be quick and come in to tea.
Dot found her father at home, and they began their meal. But little Dot was so quiet,
and sat so still, that her father asked her what was the matter. Then she thought she
would ask him what she wanted to know, for he was very kind to her, and generally
tried to answer her questions.
So Dot told him about her little girl's grave, and what the lady and gentleman had
talked about, and she asked what he thought the little girl had said, which had made
her mother stop crying.
But Dot's father could not tell her. And when Dot said she was sure she would not like to
be put in a hole like that, her father only laughed, and told her not to trouble her little
head about it: she was too young to think of such things.
"But my little girl was only just about as big as me," said Dot, "'cause Mr. Solemn told
me so."
That was an argument which her father could not answer, so he told Dot to be quick
over her supper, and get to bed. And when she was asleep, he said to his wife that he
did not think the cemetery was a good place for his little girl to play in—it made her
gloomy. But Dot's mother said it was better than the street, and Dot was too light-
hearted to be dull long.
And whilst they were talking little Dot was dreaming of Lilian, and of what she had said
the night before she died.
CHAPTER V
DOT'S BUSY THOUGHTS
A DAY or two after, as Dot was putting fresh daisies on the little grave, she felt a hand
on her shoulder, and looking up she saw her little girl's mamma. She had come up very
quietly, and Dot was so intent on what she was doing that she had not heard her. It was
too late to run away; but the lady's face was so kind and loving that the child could not
be afraid. She took hold of Dot's little hand, and sat down beside her, and then she said
very gently—
"Is this the little girl who gathered the daisies?"
"Yes," said Dot shyly, "it was me."
The lady seemed very pleased, and she asked Dot what her name was, and where she
lived. Then she said—
"Dot, what was it made you bring these pretty flowers here?"
"Please," said the child, "it was 'cause Mr. Solemn said she was ever such a little girl—
maybe about as big as me."
"Who is Mr. Solemn?" asked the lady.

"IS THIS THE LITTLE GIRL WHO GATHERED THE DAISIES?"
"It's an old man—him as digs the graves; he made my little girl's grave," said Dot,
under her breath, "and he filled it up and all."
The tears came into the lady's eyes, and she stooped down and kissed the child.
Dot was beginning to feel quite at home with the little girl's mamma, and she stroked
the lady's soft glove with her tiny hand.
They sat quite still for some time. Dot never moved, and the lady had almost forgotten
her—she was thinking of her own little girl. The tears began to run down her cheeks,
though she tried to keep them back, and some of them fell upon Dot as she sat at her
feet.
"I was thinking of my little girl," said the lady, as Dot looked sorrowfully up to her face.
"Please," said Dot, "I wonder what your little girl said to you the night before she died?"
She thought perhaps it might comfort the lady to think of it, as it had done so the other
day.
The lady looked very surprised when Dot said this, as she had had no idea that the little
girl was near when she was talking to her husband.
"How did you know, Dot?" she asked.
"Please, I couldn't help it," said little Dot; "I was putting the daisies."
"Yes?" said the lady, and she waited for the child to go on.
"And I ran in there," said Dot, nodding at the hawthorn bush. "I heard you—and,
please, don't be angry."
"I am not angry," said the lady.
Dot looked in her face, and saw she was gazing at her with a very sweet smile.
"Then, please," said little Dot, "I would like very much to know what the little girl said."
"I will tell you, Dot," said the lady. "Come and sit on my knee."
There was a flat tombstone close by, on which they sat whilst the girl's mamma talked
to Dot. She found it very hard to speak about her child, it was so short a time since she
had died. But she tried her very best, for the sake of the little girl who had covered the
grave with daisies.
"Lilian was only ill a very short time," said the lady; "a week before she died she was
running about and playing—just as you have been doing to-day, Dot. But she took a bad
cold, and soon the doctor told me my little girl must die."
"Oh," said Dot, with a little sob, "I am so sorry for the poor little girl!"
"Lilian wasn't afraid to die, Dot," said the lady.

"Wasn't she?" said Dot. "I should be frightened ever so much—but maybe she'd never
seen Mr. Solemn bury anybody; maybe she didn't know she had to go into that dark
hole."
"Listen, Dot," said the lady, "and I will tell you what my little girl said the night before
she died."
"'Mamma,' she said, 'don't let Violet and Ethel think that I'm down deep in the
cemetery; but take them out, and show them the blue sky and all the white clouds, and
tell them, Little sister Lilian's up there with Jesus.' Violet and Ethel are my other little
girls, Dot."
"Yes," said Dot, in a whisper; "I saw them at the funeral."
"That is what my little girl said, which made me stop crying the other day."
Dot looked very puzzled. There was a great deal that she wanted to think over and to
ask Solomon about.
The lady was obliged to go home, for it was getting late. She kissed the child before she
went, and said she hoped Dot would see her little girl one day, above the blue sky.
Dot could not make out what the lady meant, nor what her little girl had meant the
night before she died. She wanted very much to hear more about her, and she hoped
the lady would soon come again.
"Mr. Solemn," said Dot the next day, as she was in her usual place on the top of one of
Solomon's graves, "didn't you say that my little girl was in that long box?"
"Yes," said Solomon—"yes, Dot, I said so, I believe."
"But my little girl's mamma says she isn't in there, Mr. Solemn, and my little girl said so
the night before she died."
"Where is she, then?" said Solomon.
"She's somewhere up there," said Dot, pointing with her finger to the blue sky.
"Oh, in heaven," said Solomon. "Yes, Dot, I suppose she is in heaven."
"How did she get there?" said Dot. "I want to know all about it, Mr. Solemn."
"Oh, I don't know," said the old man. "Good folks always go to heaven."
"Shall you go to heaven, Mr. Solemn, when you die?"
"I hope I shall, Dot, I'm sure," said the old man. "But there, run away a little; I want to
tidy round a bit."
Now, Solomon had very often "tidied round," as he called it, without sending little Dot
away; but he did not want her to ask him any more questions, and he hoped she would
forget it before she came back.
But Dot had not forgotten. She had not even been playing; she had been sitting on an
old tombstone, thinking about what Solomon had said. And as soon as he had finished

Chinas New Development Strategies Upgrading From Above and From Below in Global Value Chains Gary Gereffi Full Chapter

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China’s New Development Strategies:

Upgrading from Above and from Below

ISBN 978-981-19-3007-2 ISBN 978-981-19-3008-9 (eBook)

Cover credit: Alex Linch/shutterstock.com

China’s Evolving Role in Global Value Chains: Upgrading

Digital Technologies and China’s New Development

Active Local Governments and Firm Upgrading in China

Whither Global Value Chains: The Shifting Role

China’s Shifting Role in Regional and Global Value Chains

of Technology in Guangzhou. He held the Volkswagen Endowed Chair

Dr. Wang Cassandra C. is Professor in the School of Earth Sciences,

Her research focuses on global value chains, fiscal policies, industrial

Active Local Governments and New Chinese Firms in

Whither Global Value Chains: The Shifting Role of

Industrial Upgrading from Below: Can Chinese Local

Upgrading of Chinese Domestic Firms in Advanced

China’s Shifting Roles in Asian Electronics Trade

The Reconfiguration of Global Value Chains in the Digital

Fig. 2 Changing intra-regional and inter-regional GVC shares

China’s Industrial Internet: Platform-Based Manufacturing

Subjective Social Upgrading and Downgrading of

Active Local Governments and New Chinese Firms in

Table 4 Priority firms with a registered capital above 50 million

Whither Global Value Chains: The Shifting Role of

Industrial Upgrading from Below: Can Chinese Local

Upgrading of Chinese Domestic Firms in Advanced

China’s Shifting Roles in Asian Electronics Trade

Table 3 East Asia in the world’s electronics export (Unit: US$

Gary Gereffi, Penny Bamber, and Karina Fernandez-Stark

G. Gereffi (B) · P. Bamber · K. Fernandez-Stark

© The Author(s), under exclusive license to Springer Nature 1

small developing countries alike to achieve rapid economic growth and

set of recommendations for strengthening the “resilience” of critical U.S.

To analyze these objectives, we distinguish between two broad orien-

2 Global Value Chain Perspective

global production within and across multiple industries in developed and

2.1 What Are GVCs?

to maintain or improve their positions and outcomes in the global

2.2 GVC Framework and Development Policy

3 China’s Evolving Role in the Global Economy

China’s economic growth was spurred by significant inbound foreign

These changes to China’s participation in the global economy have

1. Export-oriented industrialization—Following China’s economic

During this period, China’s R&D expenditure increased signifi-

4 Upgrading from Above and from Below

firm by 2020 with products in multiple end-market segments across the

knowledge and technology into the local economy, including a network

4.1 Implications of Upgrading from Above and Below for Human

of IT workers in developed countries actively sought new jobs (Carnegie

5 Contributions of this Volume

5.1 Part I: Digital Technologies and China’s New Development

to restructure the subcontracting networks in China’s light industries such

5.1.1 Chapter 2: China’s Industrial Internet: Platform-Based

5.1.2 Chapter 3: Alibaba’s Distribution-Driven Approach

5.1.3 Chapter 4: Subjective Social Upgrading and Downgrading

5.2 Part II: Active Local Governments and Firm Upgrading

and weakened the position of Taiwanese firms in China (Chapter 6).

5.2.1 Chapter 5: Active Local Governments and New Chinese

5.2.2 Chapter 6: Whither GVCs: The Shifting Role of Taiwanese

Initially these investments facilitated China’s entry into the informa-

5.2.3 Chapter 7: Industrial Upgrading from Below: Can Chinese

5.2.4 Chapter 8: Upgrading of Chinese Domestic Firms

5.3.1 Chapter 9: China’s Shifting Roles in Asian Electronics