Trends in Global Value Chains

2. Key trends in GVCs in nominal and real terms

The years since the COVID-19 pandemic have renewed policy attention to the resilience and reconfiguration of GVCs. Supply disruptions, logistics bottlenecks, geopolitical tensions and sharp movements in energy and commodity prices have all contributed to a perception that international production networks are becoming more fragile and less global. Nevertheless, GVCs have not disappeared, nor has there been a uniform retreat from international sourcing (Jaax, Miroudot and van Lieshout, 2023[1]; OECD, 2025[2]; Altman and Bastian, 2026[3]).

Trade via global value chains has reached historical highs in 2024 in real terms

Figure 2.1 compares the evolution of total trade in goods and services and trade in intermediate goods and services (the products traded within GVCs) between 1995 and 2024 in current prices and in real terms, as a percentage of world GDP.1 The distinction between current prices and real indicators is particularly important because the post-pandemic period was a period of high inflation and large relative price shocks. In such an environment, nominal trade values can rise or fall because prices have changed, not because firms have fundamentally reorganised production.

The OECD PYP ICIO dataset directly addresses this measurement challenge. It provides ICIO tables both in current prices and in previous year’s prices, allowing indicators to be constructed in nominal terms and in chain-linked volume terms. In addition, the PYP dataset includes projections2 to look at more recent years (2024 in the 2026 edition).

Before the global financial crisis, both nominal and real measures show a strong increase in trade via GVCs, confirming their rapid expansion during the period of “hyperglobalisation” (Subramanian and Kessler, 2014[4]). After 2011, however, the two series diverge: the current price indicator suggests a more pronounced decline, while the real indicator points instead to a stabilisation of trade via GVCs at a historically high level.

This divergence becomes especially important after the COVID-19 pandemic. In current prices, trade via GVCs increased sharply in 2021 and 2022, partly reflecting the surge in prices for imported intermediate inputs, especially energy and commodities (see Box 2.1). The current price indicator declined in 2023 and 2024. However, in real terms, trade via GVCs remained high, close to its 2022 peak, at about 17%. The volume-based indicator suggests that, despite pandemic-related disruptions and geopolitical tensions, world production continued to rely heavily on foreign intermediate inputs. In 2024, total trade accounts for about 31% of world GDP in real terms, as compared to 17% for trade via GVCs. A significant share of total trade is thus related to activities of firms within GVCs, importing intermediate inputs to produce final goods and services. While total trade in real terms has slightly declined since 2022, it is not the case for trade via GVCs.

Box 2.1. Commodities price fluctuations and their impact on GVC measurement

The relationship between trade via GVCs in current prices and the price of commodities (including both fuel and non-fuel) can be understood by looking at Figure 2.2. Trade via GVCs in current prices (right scale) tends to follow the fluctuations of the IMF all commodities price index.

When there is a drop in prices of raw materials (as during the Global Financial Crisis in 2008‑2009 or in the mid-2010s), trade via GVCs is going down. When there is a surge in prices of commodities (as during the COVID-19 period), the indicator is increasing.

Industries differ markedly in their reliance on trade via GVCs, with some remaining highly globally integrated

The aggregate stability of trade via GVCs in real terms masks important differences across industries. Figure 2.3 compares trade via GVCs by industry in 2011 on x-axis and 2024 on y-axis in real terms. Industries above the 45-degree line are those where production has become more import intensive, while industries below the line record a decline in the foreign input content of production. This sectoral perspective complements the aggregate evidence from Figure 2.1 and shows that notwithstanding the series of supply chain disruptions and trade policy changes witnessed since the Global Financial Crisis, certain sectors increase their global integration.

The industries with the highest trade via GVCs in 2024 remain concentrated in manufacturing and transport-related activities. Coke and petroleum products, water transport, air transport, ICT and electronics, rubber and plastics, chemicals, basic metals and motor vehicles all record values above 35% of gross output. These sectors typically rely on internationally traded inputs, specialised components, energy-related products or cross-border logistics services. Their position in the upper part of the chart confirms that, even after the pandemic and recent geopolitical shocks, several core GVC industries continue to rely significantly on foreign intermediate inputs.

That said, trade via GVCs in the motor vehicle sector declined over the observation period. Whereas it was the 6^th most internationalised sector in 2011, it slipped to the 10^th place in 2024 and was overtaken by chemicals, air transport and electronic equipment.

Over the period 2011‑24, trade via GVCs increased most visibly in air transport, warehousing, pharmaceuticals, electricity, rubber and plastics, recreation, non-metallic minerals, paper and printing, IT services and postal services. The increase in pharmaceuticals is notable in the context of recent policy attention to medical supply chains: despite discussions on increasing domestic capacity, the sector’s production has become more internationally input-intensive in real terms. The increase in logistics-related activities such as air transport and warehousing also points to the continuing importance of internationally connected services in supporting production networks.

By contrast, several sectors moved below the 45-degree line. The largest declines are observed in coke and petroleum products, water transport, basic metals, energy mining, fabricated metals and mining services.

 

Most economies rely more on foreign inputs in 2024 than in 2011, although patterns differ widely

Figure 2.4 presents backward and forward GVC participation rates for OECD and G20 economies, comparing 2011 and 2024. While backward GVC participation measures the share of foreign value added embodied in a country's exports, forward GVC participation measures the share of domestic value added used as an input in other countries' exports. Taken together, the two panels provide a comprehensive picture of how deeply economies are embedded in international production, both as buyers and as sellers of intermediate inputs.

Across the full sample, backward participation rates are generally higher than forward participation rates, reflecting the fact that most economies are more deeply integrated as assemblers of imported inputs than as upstream suppliers to others. The dominant pattern between 2011 and 2024 is one of broad-based increase on the backward side: the majority of economies record a higher share of foreign value added in their exports in 2024 than in 2011. The forward side presents a more heterogeneous picture, with some economies — particularly commodity exporters and upstream producers — maintaining or slightly expanding their role as value-added suppliers to third-country exporters, while others record declines comparable in magnitude to those observed on the backward side.

Several country-level patterns are worth highlighting. Luxembourg records the highest backward participation in the sample in both years, a reflection of its position as a small, highly open economy deeply integrated into cross-border financial and business services value chains. At the other end of the size spectrum, large economies such as the United States, the People’s Republic of China (hereafter “China”) and Brazil display among the lowest backward participation rates, consistent with their more self-sufficient production structures and greater reliance on domestic intermediate inputs. On the forward side, Kazakhstan and Norway stand out with among the highest forward GVC participation rates in 2024, driven by their upstream roles as major energy exporters whose domestic VA feeds extensively into the production processes of partner economies.

China's decrease in backward participation between 2011 and 2024 may be reflecting a well-documented shift toward greater domestic value chain development. However, this decrease in 1.8 percentage points is smaller than that for current-price statistics (3.3 percentage points). This could partly reflect the end of the commodity boom cycle, whose price effects may overestimate the extent to which backward GVC participation has decreased in emerging markets like China.

 

Post-pandemic changes in global value chain participation reflect shifts in sourcing and production structures

Changes in the foreign VA content of exports can come from several sources. Firms may change where they buy inputs. They may also change what types of inputs they use, how much VA is generated domestically, or which product they export. Figure 2.5 separates these channels3 for China, Japan, the United States and the European Union, comparing the pre-pandemic period, 2011‑19, with the pandemic and post-pandemic period, 2019‑24.

The main finding is that the post-pandemic increase in foreign VA embodied in exports was not mainly driven by a general shift towards more foreign sourcing. Between 2019 and 2024, foreign VA shares increased in all four economies shown. However, changes in input sourcing made a negative contribution in all four cases. This suggests that, at the margin, firms or sectors were not simply switching towards more foreign suppliers.

Instead, the increase came mainly from changes in production structures and export composition. In other words, economies exported more of the products and activities that tend to embody foreign VA, or they used technologies and input combinations that rely more on internationally produced inputs. It shows that GVC participation can rise even when some firms are trying to reduce foreign sourcing in specific areas. Structural changes in what economies produce and export can offset changes in sourcing behaviour.

Before the pandemic, the patterns were more differentiated. Between 2011 and 2019, China and the United States recorded declines in the foreign VA content of exports, while the European Union recorded an increase and Japan remained broadly stable. In China, the decline was mainly associated with sourcing changes, consistent with the development of domestic supplier capabilities. In the European Union, the increase reflected continued integration in cross-border production networks and changes in export composition.

Gross and value-added trade point to different bilateral dynamics among major economies

Gross exports capture the value of direct shipments between two economies, while VA exports capture the domestic value ultimately embodied in partner demand, including through indirect routes via third economies. A widening gap between the two series can point to changes in the role of “connector” economies that intermediate trade and production linkages across major markets.

Figure 2.6 compares bilateral manufacturing exports among China, the European Union and the United States in gross and VA terms, in real terms and indexed to 2011. The Figure highlights that bilateral GVC linkages among the three major economies remain substantial, but their configuration has changed. China’s manufacturing exports to the European Union increased most strongly, with both gross and VA exports reaching about 2.2 times their 2011 level by 2024. China’s exports to the United States also increased, but with value-added exports rising faster than gross exports. This suggests that Chinese domestic VA has continued to reach US demand, including potentially through indirect production and trade channels.

 

For the European Union, manufacturing exports to China and the United States also expanded, but gross and VA measures do not always move in parallel. EU gross exports to China increased more rapidly than EU VA exports, suggesting a larger role for foreign inputs embodied in EU shipments or changes in export composition. By contrast, EU exports to the United States show a smaller gap, with VA exports growing broadly in line with gross exports.

The United States shows more subdued dynamics. US manufacturing exports to China remain above their 2011 level in both gross and VA terms, but the increase is smaller than for China’s exports to either major partner. By 2024, US gross exports to the European Union were only moderately above their 2011 level, while US VA exports were close to their starting point.

Overall, Figure 2.6 shows that changes in bilateral gross trade do not necessarily mean that underlying interdependence has fallen. Value added can continue to move through indirect channels, especially when connector economies become more important in production and trade. Connector economies are countries that assemble, process, re-export or embed foreign inputs into their own exports. This is particularly relevant in a context of geopolitical tensions, trade policy changes and efforts by firms to reorganise supply chains.

Notes

← 1.  Expressed as a share of world GDP, trade via GVCs can be understood as a measure of the import intensity of production, i.e. how many cents of imported inputs are needed in order to produce one dollar of output in the world (Timmer et al., 2021[19]).

← 2.  Tables both in current and previous year’s prices are projected using more recent aggregate information from national accounts and international trade statistics. See Annex A for the methodology.

← 3.  The decomposition separates four channels that can explain the increase or decrease in backward GVC participation. First, the technology component reflects changes in the types of intermediate inputs used to produce output. This matters because some inputs are more likely than others to embody foreign value added. For example, if inputs such as software, cloud services, and specialised electronic components draw heavily on foreign supply chains, a shift towards more digitalised production processes will tend to increase backward participation. Second, the input-sourcing component reflects changes in where inputs are sourced from, including shifts between domestic and foreign suppliers and across foreign supplier countries. Third, the value-added component measures the role of changes in the share of value added in gross output. Finally, the export-composition component reflects changes in the mix of products exported by a country, since backward participation may increase if exports shift towards industries that typically embody greater foreign content. The results should be interpreted as a descriptive accounting exercise rather than as causal evidence: they indicate which components of the GVC participation indicators account for observed changes.