THE CROSS-SECTORAL TECHNOLOGICAL INTERDEPENDENCIES OF CENTRAL AND EASTERN EUROPE IN THE ERA OF INDUSTRY 4.0 AND CHINESE DIGITAL SILK ROAD
THE CROSS-SECTORAL TECHNOLOGICAL INTERDEPENDENCIES OF CENTRAL AND EASTERN EUROPE IN THE ERA OF INDUSTRY 4.0 AND CHINESE DIGITAL SILK ROAD

Summary/Abstract: Aim: The article aims to assess the flows of value added in the servicification of manufacturing within the two most critical value-added providers for Central and Eastern Europe (CEE): Germany and China in the era of Industry 4.0 and the Digital Silk Road (DSR). Methods: The input-output model for the decomposition of gross exports was applied to evaluate the cross-sectoral links between analyzed economies. Results: The CEE economies are increasingly dependent on high-quality services from Germany and China for their man­ufacturing, while analogous flows from CEE to Germany and China are decreasing or remaining stable. Ger­man manufacturing is starting to depend more on Chinese services’ value-added in advanced sectors. There was no direct trade-off between pairs of economies, but a decrease in German value-added flows to China led to a significantly larger increase in Chinese value-added in German manufacturing. Conclusions: Bearing in mind the limitations of the study, the deepened imbalance in value-added flows between economies was proved. Moreover, the study proved the effectiveness of China’s Industry 4.0 and DSR in terms of enhancing the sophistication of Chinese value-added exports and making key economies reliant on this value-added.

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