Chokepoints and value capture: China’s electrical and optical sector in the global value chain under geopolitical risk

Using the 2020 and 2024 multiregional input-output tables at constant prices, we examine China’s position in the electrical and optical equipment (E&E) value chain and its exposure to hypothetical decoupling. China’s share of world E&E output declines from 42.2% to 40.4%, while the domestic value-added share of its exports falls from 75.9% to 71.9% and its GVC position moves further downstream. Japan, the Republic of Korea, Taipei, China, and the United States jointly account for 67.7% of foreign E&E value added embodied in China’s E&E exports in both years. Under unchanged final demand, extracting selected E&E linkages produces broadly comparable percentage output reductions in the receiving E&E sectors for most bilateral pairs, with effects extending to third economies. These findings highlight persistent sourcing concentration and production interdependence.