Economic Growth, Global Trades and the Changing Structure of Production and Opportunities Among Asian Countries: The Case of Selected Electronics Products

Abstract

One of the major themes in recent discourse on economic growth and development has been the rapid rise of several new global players and their impacts on other economies. Since embarking on its economic reform and open door policy in the late 1970s, China has emerged as the world’s new economic powerhouse. Its accession into the World Trade Organization (WTO) in 2001 further accelerated the growth. China’s vast potential market and cost competitiveness have combined to attract substantial foreign investment especially in electronics production. China’s dominance in electronics production as reflected in its export performance may jeopardize the position of other countries in Asia especially the ASEAN-5 countries, which have previously been the established regional locations for electronics production. Electronics production is easily fragmented and lends itself to extensive distribution of production centers, which in turn shape the nature and forms of global and regional production networks. Global trades in electronic products reflect the geographic distribution of electronics production and the changing structure of opportunities and economic fortunes of participating countries. The objective of this paper is to assess the changing dynamics of electronic production and trades among Asian countries with an emphasis on the impacts of the recent global recession on the performance of the major Asian electronics producers and the concomitant implications of China’s impressive economic growth and ascendancy on the performance of its Asian neighbors. This study examines the trends in the export performances of selected electronic products: office machines, data processing machines, and telecommunication equipments. The study tracks the rise of China and its impacts on neighboring Asian countries using trend analysis of electronics exports into the United States from 1989-2008. The competitiveness of participating countries is evaluated using the Revealed Comparative Advantage (RCA) method.The preliminary findings of the trend analysis show that China’s presence has little effect on ASEAN-5 from 1989 to 2001. However, the impacts of China appear to become more significant in the export trends for most of the electronics products beginning from 2001. The trends suggest a decreasing export values and export shares in the ASEAN-5 as a whole and in most of the individual countries when compared to the Chinese export values and export shares.