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China and the Future of Asian Electronics Trade

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  • Byron Gangnes
  • Ari Van Assche

Abstract

China's emergence as a key player in the global electronics industry has ignited concerns among its East Asian neighbors. Upper and middle-income economies fear that China's rise is hollowing out their electronics industrial base. Lower-income economies worry that they cannot compete with China's seemingly endless supply of cheap labor. In this chapter, we describe the forces behind China's rise in electronics, and we consider the implications for regional electronics trade and production patterns. Using a unique world electronics production data set, we investigate the upgrading trajectories of East Asian economies within the industry. Consistent with the theory of international production fragmentation, we find that Japan and the NIEs have a more sophisticated production mix than their lower-income neighbors. These latter economies, however, are upgrading their electronics industries more rapidly. L'émergence de la Chine comme étant un joueur clé dans l'industrie électronique mondiale a suscité de l'inquiétude parmi ses voisins de l'Asie de l'Est. Les économies à revenus élevé et moyen craignent que la montée de la Chine nuise à leur centre industriel électronique. Les économies plus pauvres, pour leur part, s'inquiètent du fait qu'elles ne pourront pas être compétitives face à la main d'uvre bon marché sans limite de la Chine. Dans ce chapitre, nous décrivons les forces à l'origine de la montée de la Chine dans le domaine de l'électronique, et en étudions les conséquences pour le commerce électronique régional et les modèles de production. Employant une banque de données unique sur la production électronique mondiale, nous examinons les trajectoires de perfectionnement des économies de l'Asie de l'Est dans l'industrie. En accord avec la théorie de fragmentation de la production internationale, nous trouvons que le Japon et les nouvelles économies industrialisées détiennent une combinaison de production plus sophistiquée que leurs voisins à faible revenu. Ces derniers, cependant, voient leurs industries de l'électronique progresser plus rapidement.

Suggested Citation

  • Byron Gangnes & Ari Van Assche, 2008. "China and the Future of Asian Electronics Trade," CIRANO Working Papers 2008s-05, CIRANO.
  • Handle: RePEc:cir:cirwor:2008s-05
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    File URL: http://www.cirano.qc.ca/files/publications/2008s-05.pdf
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    References listed on IDEAS

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    Cited by:

    1. Ari Van Assche & Chang Hong & Veerle Slootmaekers, 2008. "China's International Competitiveness: Reassessing the Evidence," LICOS Discussion Papers 20508, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    2. Byron Gangnes & Ari Van Assche, 2010. "Global Production Networks in Electronics and Intra-Asian Trade," LICOS Discussion Papers 25710, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    3. Alyson C. Ma & Ari Van Assche, 2012. "Is East Asia's Economic Fate Chained to the West?," CIRANO Working Papers 2012s-11, CIRANO.
    4. Peltonen, Tuomas & Pula, Gabor, 2009. "Has emerging Asia decoupled? An analysis of production and trade linkages using the Asian international input-output table," Working Paper Series 993, European Central Bank.

    More about this item

    Keywords

    China; trade; technological upgrading; electronics; Chine; commerce; perfectionnement technologique; électronique;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

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