Are We Transforming Towards More Balanced Relationships? Production Connections Between China and Poland in the 21st Century

Abstract

Abstract The trade relations between Poland and China have been highly unbalanced. Taking into account the fact that standard trade flows do not reflect the real position of the economy in production links, it was decided to analyse the value-added flows. The goal of the study is to identify the intensity of the value added flows between the Polish and Chinese industries. Two hypotheses were stated: 1) as a result of the introduction of the Belt and Road Initiative in 2013, the role of Chinese value added directed to Poland increased; 2) the role of Poland as a supplier of added value for Chinese production is gradually growing. The study utilizes the Inter-Country Input-Output Database in the output-input model. Results indicate that Poland has significantly worsened its position in global production links in relation to China in many industries and is still more dependent on value added coming from the EU than on the Chinese value added. The role of Polish value added in Chinese industries is low and has not increased since the BRI introduction. Moreover, it is difficult to conclude that the growing role of China in production links with Poland is the result of the BRI introduction, because no significant changes were observed after starting this strategy.