Production sharing in East Asia: China's position, trade pattern and technological upgrading

International production sharing has been a key feature of East Asian economic development in recent decades, with firms in advanced Asian economies relocating their production to China, using it as an assembly base and exporting the final products to the United States and Europe. China has taken advantage of this process and transformed into a global manufacture centre, with the country’s emergence having reshaped the Asian production network and trade pattern. This chapter analyses the economic model and development strategy in East Asia, China’s position in East Asia’s production network, as well as its impact on China’s technological upgrading. We find that China has moved to the centre of East Asia’s production network, thanks to its export-led development strategy. It has significantly upgraded its technology and narrowed its technology gap with ASEAN-4, although the gap between China and Asian more-advanced economies remains fairly large and noticeable.

Related Subject(s): Economic and Social Development

Countries: China