Global Value Chain Development Report 2025: Reglobalization and Rewired GVCs in a Changing World
SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation, and Infrastructure | SDG 17: Partnerships for the Goals
Ministry of Commerce and Industry | Ministry of Finance | Ministry of Heavy Industries & Public Enterprises
The Global Value Chain Development Report 2025 highlights a transformative phase in international production termed “reglobalization“. Rather than unraveling, global value chains (GVCs) are being “rewired” in response to successive shocks, geopolitical frictions, and climate imperatives. Despite these strains, GVC-related trade remains indispensable, accounting for 46.3% of global trade in 2024.
Key Findings on GVC Reconfiguration:
Resilience through Regionalization: While global integration remains durable, production is increasingly reconfiguring into regional hubs and networks, notably within Asia and North America. Major economies like the US, China, and the EU are reducing their dependence on foreign value-added in domestic consumption.
The Rise of Services: Services have overtaken goods in GVC participation, proving more resilient post-pandemic. Digitally deliverable services, such as finance and IT, now represent more than one-third of the content embedded in manufacturing exports.
Lengthening Production Stages: Since 2020, the average number of production stages in GVCs has lengthened in many economies, driven by supply chain disruptions and the rerouting of trade, particularly in Europe and Central/West Asia.
Emergence of Connector Economies: Geopolitical fragmentation has led firms to reroute trade and investment through “connector” economies like Viet Nam, Mexico, and Türkiye, which bridge rival trade blocs.
What is Reglobalization? Reglobalization is a phase where firms and governments do not retreat from global integration but instead reconfigure production networks to meet new social, economic, and security priorities—such as resilience, digitalization, and sustainability—rather than focusing solely on efficiency gains.
What are Global Value Chains (GVCs)? GVCs refer to the international production networks where different stages of a manufacturing process—from design and component production to final assembly and marketing—are fragmented across multiple countries. Rather than a product being made entirely within one nation, GVC-related trade involves goods or services crossing international borders at least twice as intermediate inputs before reaching the final consumer. These chains serve as the “backbone of the world economy,” accounting for nearly 46.3% of global trade as of 2024 and acting as critical channels for technology transfer, productivity growth, and economic development.
Policy Relevance
The report provides a diagnostic for policymakers navigating a world where readiness, not volume, is the new basis of competitiveness.
Inclusive Participation: Expanding entry for developing economies and small firms requires targeted investment in digital infrastructure and trade finance. Currently, the global trade finance gap exceeds $2.5 trillion, with SMEs facing the largest barriers.
Sustainability as a Core Driver: To prevent carbon leakage, climate and trade policies must be aligned. The report suggests that market-oriented instruments, like Emissions Trading Systems (ETS) and carbon pricing, can improve emissions efficiency while minimizing GDP losses.
Governance Innovation: Traditional multilateral negotiations are being supplemented by Targeted Trade Deals (TTDs)—flexible, issue-specific agreements often focused on digital trade or critical minerals. More than 180 such deals were signed between 2021 and 2024.
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