Can China's aid promote the position upgrading of recipient countries in the global value chains

Abstract This paper examines the effect of China's aid on the position upgrading of recipient countries in the global value chains (GVCs). It is found that China's aid can significantly promote the position upgrading of recipient countries in the GVCs. Mechanism tests have shown that China's aid has ultimately contributed to upgrading the recipient countries' position in the GVC through the three channels of upgrading their technological level, improving their infrastructure, and promoting their level of industrialization. The findings of this paper contribute to promoting research on the effectiveness of foreign aid in the development of recipient countries.