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The Rise of China and Asia's Flying-Geese Pattern of Economic Development: An Empirical Analysis Based on US Import Statistics

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  • C. H. KWAN

Abstract

Although manufactured goods have come to make up the bulk of China's fast expanding exports, the country's competitiveness still lies in low-value-added products. Reflecting this, Chinese exports do not directly compete with Japanese exports; rather, they complement each other. China's export structure also lags behind Asia's newly industrializing economies (NIEs) and major members of the Association of Southeast Asian Nations (ASEAN). Based on a comparison of the trade structures among Asian nations, we find that they are broadly in line with their respective levels of economic development. In short, there is no evidence showing that the flying-geese formation has been disrupted by the emergence of China. Even in China's fast-growing IT-product sector, the country's export competitiveness still lags far behind not only Japan, but also other Asian countries. There is a clear division of labor between Japan and China, with the former specializing in high-value-added products and the latter in low-value-added products. There is little overlap, especially in the high-value-added categories. In the new economy, human capital is the single most important asset. It is unrealistic to expect the Chinese economy to leapfrog because China is unlikely to greatly improve the educational level of the entire nation in a short period. Instead, economic development can only be a step-by-step process.

Suggested Citation

  • C. H. Kwan, 2002. "The Rise of China and Asia's Flying-Geese Pattern of Economic Development: An Empirical Analysis Based on US Import Statistics," Discussion papers 02009, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:02009
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    Cited by:

    1. Thorbecke, Willem, 2014. "The contribution of the yen appreciation since 2007 to the Japanese economic debacle," Journal of the Japanese and International Economies, Elsevier, vol. 31(C), pages 1-15.
    2. Setyastuti, Rini & Adiningsih, Sri & Widodo, Tri, 2018. "ASEAN Economic Community: Theoretical versus Practical Economic Integration," MPRA Paper 86919, University Library of Munich, Germany.
    3. Coxhead, Ian, 2007. "A New Resource Curse? Impacts of China's Boom on Comparative Advantage and Resource Dependence in Southeast Asia," World Development, Elsevier, vol. 35(7), pages 1099-1119, July.
    4. Ramkishen S. Rajan & Sadhana Srivastava, 2010. "Implications Of The Economic Rise Of The PRC For Asean and India: Trade and Foreign Direct Investment," Working Papers id:2680, eSocialSciences.
    5. Chen, Lurong & De Lombaerde, Philippe, 2014. "Testing the relationships between globalization, regionalization and the regional hubness of the BRICs," Journal of Policy Modeling, Elsevier, vol. 36(S1), pages 111-131.
    6. Widodo, Tri, 2007. "“Flying Geese” Paradigm: Review, Analytical Tool and Application," MPRA Paper 78218, University Library of Munich, Germany.
    7. Peter Draper & Andreas Freytag & Sören Scholvin & Luong Thanh Tran, 2016. "Is a ‘Factory Southern Africa’ Feasible?," World Bank Other Operational Studies 23788, The World Bank.
    8. Alan G. Ahearne & John G. Fernald & Prakash Loungani & John W. Schindler, 2006. "Flying geese or sitting ducks: China’s impact on the trading fortunes of other Asian economies," International Finance Discussion Papers 887, Board of Governors of the Federal Reserve System (U.S.).
    9. Brigitte Desroches & Michael Francis, 2006. "Institutional Quality, Trade, and the Changing Distribution of World Income," Staff Working Papers 06-19, Bank of Canada.
    10. Peter Draper & Andreas Freytag & Sören Scholvin & Luong Thanh Tran, 2016. "Is a 'Factory Southern Africa' Feasible? Harnessing Flying Geese to the South African Gateway," CESifo Working Paper Series 5867, CESifo Group Munich.

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