Abstract: Under the trend of restructuring global value chain (GVC), different industries vary in the degree of GVC participation in China, so does the intra-industry income gap across industries. Literature reviews show that an increase of GVC participation will widen intra-industry income gap through the intervening transmission mechanisms such as intermediate goods trade, technological progress and factor inputs. Therefore, this paper will apply data from World Input-Output Database, a total of 19 industries in China from 1996 to 2009, to study the impact and mechanism of forward participation on intra-industry income disparity at the early stage of industrial participation in GVC; variables such as trade in intermediate goods, technological progress and factor inputs are introduced to construct panel regression models; and the differences in performance between labor-intensive industries and capital-intensive industries are compared. The empirical results show that GVC participation will widen the income gap between high- and low-skilled laborers within industries in China, and that the income gap in capital-intensive industries is basically higher than that in labor-intensive industries. At present, in the context of Dual-cycle Development Pattern, we should deepen the participation in GVC, refine the specialization degree of intermediate goods production, optimize approaches to technology progress, strengthen the skill level of low-skilled laborers, and narrow the intra-industry income gap so as to realize common prosperity.

Key words: participation in GVC, intra-industry income gap, forward participation, industry factor intensity