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China's Trade Acceleration and the Deepening of an East Asian Regional Production Network

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  • Sarah Y. Tong
  • Yi Zheng

Abstract

China's recent surge in trade has been associated with its deepening but contrasting trade relations with its two groups of key trading partners. On the one hand, China's trade surpluses with the USA and the EU have risen rapidly, reaching US$144bn and US$91bn in 2006, respectively. On the other hand, China is importing heavily from its Asian neighbors. This diverging pattern of trade relations between China and its main trading partners reflects the continuous expansion and intensification of a complex cross-border production network in Asia, particularly for consumer electronics. In the process of deepening manufacturing sharing, China serves as an essential export platform for firms headquartered in the more advanced economies. These firms export intermediate goods from the relatively more advanced Asian economies to their affiliates in China where these inputs are assembled and then shipped to key export markets, including primarily the USA and the EU. One apparent outcome of the growing processing and assembly trade is the increased interdependency among Asian economies, which are now more dependent on each other than ever. It has also led to substantial structural changes and technological upgrading in China's traded goods. Copyright (c) 2008 The Authors. Journal compilation (c) 2008 Institute of World Economics and Politics, Chinese Academy of Social Sciences.

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Bibliographic Info

Article provided by Institute of World Economics and Politics, Chinese Academy of Social Sciences in its journal China & World Economy.

Volume (Year): 16 (2008)
Issue (Month): 1 ()
Pages: 66-81

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Handle: RePEc:bla:chinae:v:16:y:2008:i:1:p:66-81

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Cited by:
  1. Willem Thorbecke, 2010. "Investigating the Effect of Exchange Rate Changes on the People’s Republic of China’s Processed Exports," Finance Working Papers 21989, East Asian Bureau of Economic Research.
  2. Prema-chandra Athukorala & Nobuaki Yamashita, 2005. "Production Fragmentation and Trade Integration: East Asia in a Global Context," Departmental Working Papers 2005-07, The Australian National University, Arndt-Corden Department of Economics.
  3. THORBECKE, Willem, 2014. "Rebalancing Trade within East Asian Supply Chains," Discussion papers 14002, Research Institute of Economy, Trade and Industry (RIETI).
  4. Thorbecke, Willem, 2011. "Investigating the effect of exchange rate changes on china's processed exports," Journal of the Japanese and International Economies, Elsevier, vol. 25(2), pages 33-46, June.
  5. Thorbecke, Willem, 2010. "How Would an Appreciation of the Yuan Affect the People's Republic of China's Surplus in Processing Trade?," ADBI Working Papers 219, Asian Development Bank Institute.
  6. Kuroiwa, Ikuo, 2014. "Value added trade and structure of high-technology exports in China," IDE Discussion Papers 449, Institute of Developing Economies, Japan External Trade Organization(JETRO).

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