The Past and Future of China's Role in the East Asian Economy: A Trade Perspective

Abstract

Since the 1990s, the development of a market-oriented economy and engagement with globalization have given China a role as the primary export platform of the East Asian economy. This has not only promoted the exports of capital and intermediate goods of other East Asian economies, but it has also deepened the regional production networks under the US-dominated global economic system. Currently, as China is entering an economic “new normal,” its economic structure and growth pattern will experience a period of transition. Thus, its role in the East Asian economy and the global economic system will change accordingly. China's new role as a main market for the final consumer goods in the region might increase. To facilitate its change in role, China should continue to reform its domestic economy, develop regional economic cooperation, and increase the qualities of its labour force and foreign direct investment inflows. In addition, it needs to deal with several uncertainties that might arise during the transition.