The Fragmentation Of Production And Trade Pattern Of East Asian Region In 1990s

The economy of the East Asian region has grown rapidly since 1990s and its remarkable economic performance is praised as "The East Asian Miracle". The trade volume of the East Asian region accounts for about one fourth of the world trade and getting more important. The rapid growth in the region is based on" Fragmentation of Production" shaped in 1990s. This dissertation is to find out how the changes in the International Division of Labor in Manufacturing Process (division of production) and the trade pattern of this region in 1990s will affect this region's trade development in 21st century.Since the mid 1980s, companies of Japan and NIES started to invest in China and ASEAN, seeking the comparative advantage in production. This resulted in a huge increase in FDI in the East Asian region and created a new pattern of the division of production. Generally the technology-intensive intermediate goods were produced in Japan and NIES and the processing and assembling of those goods were taken place in China and ASEAN. That is, the Fragmentation of Production in which each country in a region adds value to the same product according to its comparative advantage is shaped.The most conspicuous feature of the trade pattern of the Fragmentation of Production is the increase in the trade of the intermediate goods. Currently the trade volume of the intermediate goods of the East Asia accounts for 43% of the total world intermediate goods trading. This percentage is greater than that of the EUarea (about 30%) or that of NAFTA (about 20%). And the trade volume of intermediate goods is relatively high in the field of machinery and household electronic appliances that is suitable for the Production Fragmentation. Japan, which is a major exporter of the intermediate goods, and China, which is the main importing country, play an important role in this region's division of production.As the Fragmentation of Production leads to the increase in the volume of intra-industry trade, the proportion of the intra-industry trade become growing faster than that of inter-industry trade. The intra-industry trade pattern in the East Asian region, unlikely in Western region, is based on the vertically specialized production.The intra-regional trade volume in the East Asian region also increased a lot, as the trade of the intermediate goods in the same industry increased. The dependency of intra-regional trade in the East Asian region exceeded 50% in 2000. Although the dependency of intra-regional trade in the East Asian region is a bit lower than that in EU (62.2%), the increase rate of it in the East Asian region is greater than that in the...