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Effects of High Economic Growth of China on Asia-Pacific Economies

Effects of High Economic Growth of China on Asia-Pacific Economies. Koichi Ishikawa Institute for Asian Studies Asia University. How does China’s economic growth affect Asia-Pacific economies?. Through trade

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Effects of High Economic Growth of China on Asia-Pacific Economies

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  1. Effects of High Economic Growth of China on Asia-Pacific Economies Koichi Ishikawa Institute for Asian Studies Asia University

  2. How does China’s economic growth affect Asia-Pacific economies? • Through trade • Export: supply of low-priced products → beneficial to consumers but disadvantageous for producers (and employees) • Import: increase of manufactures and raw materials • Through inward investment • Through outsourcing • By movement of natural persons

  3. Rise of China in World Trade ($ million) (IMF,IFS)

  4. Main Exporters to China ($ million) In parenthesis: share of exports to China

  5. Main Importers from China ($ million) In parenthesis: share of imports from China

  6. Net Exports to China(Trade Balance) （$ millions)

  7. FDI to China ($ million)

  8. Concentration of investment in China (%) (Investment of Country A in China ÷Total FDI in China)÷（Outward FDI of Country A ÷World outward FDI)

  9. Share of Main Exporters to USA

  10. USA(1) • Trade deficit with China • NAFTA and EU expand export share • Trade diversion: increased exports from China caused by trade diversion from other East Asian countries to China • Trade diversion caused by FDI to China • Exports by US firms investing in China

  11. USA(2) • Returns from investment in China • Procurement of parts and components from China • Outsourcing • Infringement of IPR • Industrial hollowing-out (Foundries in USA decreased from 6,150 in 1955 to 2,480 in 2004) • Loss of customers

  12. Japan • China plus Hong Kong: Biggest Trading Partner surpassing USA in 2004 • Trade with China records a surplus considering trade through Hong Kong in 2004 • Engine of economic recovery (Orders from China：Iron & Steel, Construction Machinery, Shipbuilding, Automobile, etc.) • Complementation (Japan exports high value-added products and imports low value-added products) • Trade with China prompts industrial restructuring • Industrial hollowing-out and trade conflicts

  13. Trade balance with China ($ million) (JETRO)

  14. ASEAN • Competition for FDI • Expansion of trade with China • Share of manufactures: 74% (exports) 86%(imports) • Intra-industry trade (electric machineries) • Smuggling • Low-priced, low-quality Chinese products meet the needs of low income people • Increased FDI from China • FTA with China

  15. FDI to ASEAN and China ($ million) (UNCTAD)

  16. ASEAN’s trade with ChinaValue and rate of increase ($ million) (China customs)

  17. FTA of China • 2001 Agreed to establish FTA with ASEAN in 10 years • 2003 Signed CEPA with Hong Kong • 2004 Started Early Harvest program • 2004 Started study of FTA with Republic of Korea • 2005 Started tariff reduction from July • 2010 Scheduled to establish FTA with ASEAN

  18. Importer of Raw Materials (rate of increase) (China customs)

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