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

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.