The impact of structural changes in global value chains on China’s high quality development: From perspectives of national income and carbon dioxide emissions

China’s high-quality development and carbon peaking and carbon neutrality goals both require an overall consideration to economic benefits and environmental cost. Transnational investment promotes the reconstruction of global industrial and supply chains, which also leads to dispute of environmental responsibilities under the accounting of economic benefits based on the ownership principle and the accounting of carbon emission based on the territorial principle. In this paper, we employed an inter-country inter-industry input-output database that distinguishes the activities of multinational enterprises (MNEs) and introduced counterfactual analysis and scenario analysis to evaluate impact of structural change in GVC on China’s gross national income (GNI) and CO2 emissions. There was significant industrial shift toward China from 2005 to 2016, boosting China’s GNI and CO2 emissions by 15.23% and 20.50% respectively compared to 2016 levels. For the future shift, the scenario analysis shows that compared with the relocation of GVC led by developed economies, the relocation led by China would yield lower negative impact on China’s GNI when reducing same amount of China’s CO2 emissions. The negative impact on GNI and CO2 emissions varies by sector initiating the relocation and by economy undertaking the relocation. Our analysis provides policy implications for China’s future GVC relocation and high-quality development. © 2024 Systems Engineering Society of China. All rights reserved.