Production Network Of Japanese Auto Companies In East Asia And Its Enlightenment On China

There have been some new economic situations in East Asia since 1990's. Intermediate goods trade was developed by leaps and bounds, while gradually a unique regional production networks had being formed in the tide of globalization. First, production processes are decentralized, more and more countries participated in international production and trade; transnational corporations in East Asia made its original enterprise networks beyond national boundaries, restructured at international level. Especially, Japanese auto companies' production networks had a profound influence on the development of automotive industry in East Asia.Taking the Japanese auto companies for specific research subjects, from the perspective of international production networks combined with examples of Big 3, this paper explains the formation of the production networks from history, current situation and comparing. And then it makes an empirical analysis through some investment factors to find the motivation. Finally it points out China's status in the network and proposes the significance for the development of Chinese auto- industry.The production networks trends in the auto-industry show that the auto companies can take full advantage of different countries' resource endowment advantages, achieve economies of scale, reduce costs and enhance competitiveness through the international division of production and establishment of a global network. At early times, Japanese auto companies invested in East Asia in order to occupy the markets. With globalization and the continuous development of East Asian economies, they began to use regional economic cooperation system to assemble the international division of production in East Asia, set up components export base to supply its global network. Thailand became assembly plant of Asian cars while automotive industry established by Japanese companies in China not yet fully entered the East Asian network due to less export, but is gradually integrated into it. Especially with China's sustained economic development, labor advantage is gradually reducing. FDI will be shifted and reduced. Therefore, China should use the behind advantage, absorb advanced technologies rapidly to enhance the independent research and development capabilities at limited time. Chinese Auto enterprises should become bigger and stronger to enhance competitiveness, and better promote the development of Chinese Auto-industry.