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China's integration into global production networks and its implications for export-led growth strategy in other countries in the region

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Prema-Chandra Athukorala ()

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Abstract

TThis paper examines the implications of China's rapid integration into global production networks for export performance of countries in Southeast Asia. In a clear departure from the conventional practice, the trade flow analysis of the paper is based on a careful disaggregation of reported trade data into components and final goods, with a view to delineating supply-side complementarities arising from cross-border production fragmentation. There is clear evidence that network-related trade in components has strengthened Southeast Asia's trade links with China, opening up new opportunities for the expansion of component production/assembly writhing vertically integrated global industries. However, these trade links with China have not lessoned the dependence of growth dynamism of these countries on the global economy; the dynamism of regional cross-border production networks depends inexorably on China's trade in final goods with North America and the European Union.

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Paper provided by Australian National University, Economics RSPAS in its series Departmental Working Papers with number 2008-04.

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Length: 42 pages
Date of creation: 2008
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Handle: RePEc:pas:papers:2008-04

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Related research
Keywords: China; Southeast Asia; production fragmentation; global production networks;

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Find related papers by JEL classification:
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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  1. Lall, Sanjaya & Albaladejo, Manuel, 2004. "China's Competitive Performance: A Threat to East Asian Manufactured Exports?," World Development, Elsevier, vol. 32(9), pages 1441-1466, September. [Downloadable!] (restricted)
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  2. Athukorala, Prema-chandra & Yamashita, Nobuaki, 2006. "Production fragmentation and trade integration: East Asia in a global context," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 233-256, December. [Downloadable!] (restricted)
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  3. Prema-Chandra Athukorala, 2006. "Post-crisis export performance: The Indonesian experience in regional perspective," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 42(2), pages 177-211, August. [Downloadable!] (restricted)
  4. Robert C. Feenstra & Robert E. Lipsey & Haiyan Deng & Alyson C. Ma & Hengyong Mo, 2005. "World Trade Flows: 1962-2000," NBER Working Papers 11040, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Alessandro Nicita & Marcelo Olarreaga, 2007. "Trade, Production, and Protection Database, 1976--2004," World Bank Economic Review, Oxford University Press, vol. 21(1), pages 165-171.
  6. Prema-chandra Athukorala, 2005. "Product Fragmentation and Trade Patterns in East Asia," Asian Economic Papers, MIT Press, vol. 4(3), pages 1-27, October. [Downloadable!] (restricted)
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  7. Robert C. Feenstra, . "Integration Of Trade And Disintegration Of Production In The Global Economy," Department of Economics 98-06, California Davis - Department of Economics. [Downloadable!]
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  8. Carolyn Evans & James Harrigan, 2003. "Distance, time, and specialization," International Finance Discussion Papers 766, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
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