Global value chain, regional trade networks and Sino-EU FTA.

• This paper aims to explore China's global value chain (GVC) position in relation to those of EU member states, from both total trade value and value-added perspectives. • The paper attempts to research the feasibility of the construction of a China-EU free trade agreement (FTA) by decomposing trade value-added and mapping regional trade network. • The paper endeavours to address the concerns over negative impacts of the label 'Made in China' on the EU economy from the value-added perspective. As the largest trading partner of China, the European Union (the EU) has maintained a close economic and trade relationship with China over the past several decades. However, the deepening of interdependence between them also brought about concerns over negative impacts of the label 'Made in China' on the EU economy. This paper analyses China's global value chain (GVC) position in relation to those of EU member states, followed by a comparative assessment of trade balance and industrial competitiveness between them from both total trade value and value-added perspectives. Our empirical study provides some interesting findings. First, China's trade surplus with and industrial competitiveness over EU member states have been overestimated. In addition, changing the value-chain pattern can be the long-term driving force for a China-EU free trade agreement (FTA). Finally, this paper puts forward some suggestions for when and how FTA negotiations can be initiated, mainly from Chinese perspectives. [ABSTRACT FROM AUTHOR]