China plays key role in Asian trade
Updated: 2006-04-21 20:07 China has played a key role in intra-regional
trade in the emerging Asia market, where several countries end up providing
input into the production of a single finished product, according to a report
released here Friday during the Boao Forum for Asia (BFA) annual meetings.
The BFA's second report since 2005 said the phenomena of cross-border
production sharing has created a triangular trade flow between advanced Asian
economies, developing Asian countries and the rest of the world.
In the past, advanced Asian economies, including Japan and other
industrialized economies, completed the entire manufacturing process before
exporting their finished goods directly to the United States and European
markets. Increasingly, these advanced economies are shifting the export of high
value-added products through China and other low-wage countries where the
products are re-processed or assembled before being re-exported to the United
States and European markets, forming a global production network.
According to the report, parts and components exports and re-exports
currently account for more than 45 percent of Asia's overall trade. China has
emerged as a major destination for the assembly and other labor- intensive
stages of manufacturing.
The report notes that over the last decade, foreign manufacturers have set up
more than 300,000 plants and factories in China, most of which are involved in
the assembly of imported components that are then re-exported, to more wealthier
Statistics show that the total value of re-processed exports has risen
rapidly, reaching 417 billion U.S. dollars, or about 55 percent of China's total
exports in 2005.
"Trade with China, in fact, accounts for most of the growth in intra-regional
trade in recent years," said the report. Exports to China from the region
reached nearly 30 percent of total intra-regional exports in 2004, up from 24
percent in 2000.
About 40 percent of Asian exports to China are for assembly andre-export
rather than domestic use.