China＇s Changing Economic Structure and Implications for Regional Patterns of Trade, Production and Integration

I. Introduction There is a strong momentum for regional economic integration within East Asia.1 But few countries in the region harbor any illusion of realizing a region-wide economic union any time soon. A crucial ingredient in any successful East Asia-wide economic integration effort is China. China could be a major catalyst in the integration process if it chooses to.But it would do so only if such a move is in line with the overall objectives of its foreign economic policy. More import…

China's Changing Economic Structure and Implications for Regional Patterns of Trade, Production and Integration

Without intending to do so, China has in recent years played a major role in East Asia's economic integration. It has done so mainly through the production and supply chain networks it has spun across the region. This paper argues that given the developmental trends in the Chinese economy, the Chinese government should pursue a more active strategy towards a broader and more balanced economic integration with the region. The emergence of a multi‐track production structure, increased importance of domestic consumption and the services sector, together with faster integration of the domestic economy, will fundamentally change China's trade and investment relationships with the rest of East Asia and necessitate a review of China's economic integration strategy. The paper also argues that ASEAN can play a useful role in facilitating the region‐wide integration process. (Edited by Xiaoming Feng)