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Reinventing Industrial Strategy: The Role of Government Policy in Building Industrial Competitiveness

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  • Sanjaya Lall (QEH)

Abstract

There is growing concern in Southeast and East Asia about the competitive threat posed by China’s burgeoning exports, exacerbated by its accession to the WTO. The threat is not confined to labour-intensive products but spans the whole technological and skill range. At the same time, China is rapidly raising its imports from the region, and it is not clear whether its burgeoning exports will damage its neighbours. We examine the dimensions of China’s competitive threat in the 1990s, benchmarking competitive performance by technology and market, and finds that market share losses are so far mainly in low technology products, with Japan being the most vulnerable market. We analyse market share changes and highlight product groups that are directly or indirectly exposed to a competitive threat. We examine intra-regional trade and find that China and its neighbours are raising high technology exports in tandem: the nature of the international production systems involved lead to complementarity rather than confrontation. China is thus acting as an engine of export growth for its neighbours in terms of direct trade. However, this will change as China moves up the value chain and takes on the activities that have driven East Asian export growth

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Paper provided by Queen Elizabeth House, University of Oxford in its series QEH Working Papers with number qehwps111.

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Handle: RePEc:qeh:qehwps:qehwps111

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  7. Reinert, Erik S., 1994. "Competitiveness and its predecessors - a 500-year cross-national perspective," MPRA Paper 48155, University Library of Munich, Germany.
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  9. Lall, Sanjaya, 1992. "Technological capabilities and industrialization," World Development, Elsevier, vol. 20(2), pages 165-186, February.
  10. Lall, Sanjaya & Teubal, Morris, 1998. ""Market-stimulating" technology policies in developing countries: A framework with examples from East Asia," World Development, Elsevier, vol. 26(8), pages 1369-1385, August.
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Cited by:
  1. Andrés Rodríguez-Clare, 2005. "Fallas de coordinación, conglomerados e intervenciones microeconómicas," Research Department Publications 4432, Inter-American Development Bank, Research Department.
  2. Andrés Rodríguez-Clare, 2005. "Microeconomic Interventions after the Washington Consensus," IDB Publications 6688, Inter-American Development Bank.
  3. Andrés Rodríguez-Clare, 2005. "Coordination Failure, Clusters, and Microeconomic Interventions," Journal of LACEA Economia, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
  4. Benhassine, Najy & Raballand, Gaël, 2009. "Beyond ideological cleavages: A unifying framework for industrial policies and other public interventions," Economic Systems, Elsevier, vol. 33(4), pages 293-309, December.
  5. Shafaeddin, Mehdi, 2008. "South-South Regionalism And Trade Cooperation In The Asia-Pacific Region," MPRA Paper 10886, University Library of Munich, Germany.
  6. Shafaeddin, Mehdi, 2009. "Impact of Selectivity and Neutrality of trade Policy Incentives on Industrialization of Developing Countries; Implications for NAMA Negotiations," MPRA Paper 15037, University Library of Munich, Germany.
  7. Mo, Pak Hung, 2011. "Trade Liberalization Sequence for Sustained Economic Growth," MPRA Paper 28917, University Library of Munich, Germany.
  8. Shafaeddin, Mehdi, 2010. "Trade liberalization, industrialization and development; experience of recent decades," MPRA Paper 26355, University Library of Munich, Germany.
  9. Christian Bellak & Rajneesh Narula, 2008. "EU enlargement and consequences for FDI assisted industrial development," Economics & Management Discussion Papers em-dp2008-69, Henley Business School, Reading University.
  10. Shafaeddin, Mehdi, 2010. "The Role of China in Regional South-South Trade in Asia-Pacific: Prospects for industrialization of the low-income countries," MPRA Paper 26358, University Library of Munich, Germany.
  11. Rodrik, Dani, 2004. "Industrial Policy for the Twenty-First Century," Working Paper Series rwp04-047, Harvard University, John F. Kennedy School of Government.
  12. Mallett, Alexandra, 2007. "Social acceptance of renewable energy innovations: The role of technology cooperation in urban Mexico," Energy Policy, Elsevier, vol. 35(5), pages 2790-2798, May.
  13. Narula, Rajneesh & Bellak, Christian, 2008. "EU enlargement and consequences for FDI assisted industrial development," MERIT Working Papers 067, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  14. Khemraj, Tarron & Hinova, Diana, 2011. "Elected Oligarchy and Economic Underdevelopment: The Case of Guyana," MPRA Paper 29733, University Library of Munich, Germany.
  15. Uzma Zia, 2007. "International Competitiveness  Where Pakistan Stands?," Development Economics Working Papers 22222, East Asian Bureau of Economic Research.
  16. Andrés Rodríguez-Clare, 2005. "Intervenciones microeconómicas después del Consenso de Washington," Research Department Publications 4394, Inter-American Development Bank, Research Department.
  17. Helen Shapiro, 2007. "Industrial Policy and Growth," Working Papers 53, United Nations, Department of Economics and Social Affairs.
  18. Uzma Zia, 2007. "International Competitiveness—Where Pakistan Stands?," PIDE-Working Papers 2007:28, Pakistan Institute of Development Economics.
  19. Shafaeddin, Mehdi, 2010. "The rationale for South-South trade; An Alternative Approach," MPRA Paper 26354, University Library of Munich, Germany.

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