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Can Trade with the People’s Republic of China Be an Engine of Growth for Developing Asia

  • Park, Donghyun

    (Asian Development Bank)

  • Shin, Kwanho

    (Asian Development Bank)

The recession in the United States in the wake of the global financial crisis has dampened developing Asia’s exports and growth. As a result, developing Asia is looking increasingly to the People’s Republic of China (PRC) as a source of demand and growth. This paper empirically assesses the PRC’s potential an engine of growth for developing Asia. The most significant finding is that the share of final goods in the PRC’s imports from East and Southeast Asia has been growing while the share of parts and components has been shrinking, suggesting that the PRC is becoming more of a consumer and less of an assembler. This provides some grounds for optimism about the prospects of trade with the PRC as a source of resilience against extraregional demand shocks in the short run and an additional source of growth in the long run.

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Article provided by Asian Development Bank in its journal Asian Development Review.

Volume (Year): 27-1 (2010)
Issue (Month): 1 ()
Pages: 160-181

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Handle: RePEc:ris:adbadr:2716
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  1. Greenaway, David & Mahabir, Aruneema & Milner, Chris, 2008. "Has China displaced other Asian countries' exports?," China Economic Review, Elsevier, vol. 19(2), pages 152-169, June.
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  6. 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.
  7. Pula, Gabor & Peltonen, Tuomas A., 2009. "Has emerging Asia decoupled? An analysis of production and trade linkages using the Asian international input-output table," Working Paper Series 0993, European Central Bank.
  8. Drusilla K. Brown & Alan V. Deardorff & Robert M Stern, 2002. "The Effects of Multinational Production on Wages and Working Conditions in Developing Countries," Working Papers 486, Research Seminar in International Economics, University of Michigan.
  9. Prema-chandra Athukorala, 2005. "Product Fragmentation and Trade Patterns in East Asia," Asian Economic Papers, MIT Press, vol. 4(3), pages 1-27, October.
  10. Kimura, Fukunari & Ando, Mitsuyo, 2005. "Two-dimensional fragmentation in East Asia: Conceptual framework and empirics," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 317-348.
  11. Marcus Noland, 1995. "China and the International Economic System," Working Paper Series WP95-6, Peterson Institute for International Economics.
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