Research On The Regional Production Networks In East Asia

Since the 1990s, special regional production networks have emerged and developed in East Asia, which influences the international division of labor, the enterprises forms and the future of regionalization in East Asia, and determines the role of East Asia in the world economy. A thorough analysis on this phenomenon will help us to understand the essence of production and specialization in East Asia, and, more importantly, China's role, position, and the coming challenges and opportunities.Through a synthesized analysis way by joining historical, institutional, normative and positive perspectives, this paper studies this phenomenon in the following aspects: (1) the forming and developing process of East Asian production networks; (2) the macro-features;(3) the micro-features; (4)its economic influences; (5) and the relation with China.The forming and developing process of production networks can be divided into two periods by the early 1990s. In the former period, the Flying-geese Pattern supported by Japan produced the embryo of production networks in East Asia. There were two characteristics in this period. First, it was dominated by Japanese enterprises. Second, the division of labor in East Asia spread along industries. Since the early 1990's, the production networks have developed further, and the division of labor spread along the value chains. The driving forces behind it include Institution, Technique, and Organization. The late developing economies took unilateral liberation measures on trade and FDI, regionalization process propelled the trade and FDI liberation, and international economic organizations supported this process too. All these factors supply an institutional base. Modularization gives the technological possibilities of fragmented production. The revolutions of communications technologies reduce the service costs greatly. These technological factors build a technique base. From the organizational perspective, the fierce market competition and changing tastes force the enterprise to develop from Fordism's vertical integration to Post-Fordism's enterprise networks. The spread of enterprise networks in some region provides an organizational base for the regional production networks.The macro-features of East Asian regional production networks show as FDI-trade nexus. Because the economies in East Asia develop in different phases, the developed economies supply FDI for the developing economies, thus forming the regional production networks. This kind of vertical FDI, compensating with trade, gives birth to the FDI-trade nexus in East Asia. FDI and outsourcing promote the parts and components trade in East Asia greatly. The trade of parts and components focuses heavily on IT and machinery products. As a result, the East Asian economies depends more and more on each other, trade intensity is growing gradually, in the end, forms a special triangle trade pattern centering on China.The micro-features of East Asian production networks can be seen as the internationalization of enterprise networks. According to the governance theory, the enterprises networks can be classified into three types, i.e., modular networks, relational networks and captive networks. Japanese Keiretsu can be categorized as captive networks, and Overseas Chinese small and medium-sized enterprise networks relational networks. Although USA isn't a member of East Asia, American enterprises'modular networks spread in East Asia and cultivates the producing abilities of East Asian enterprises significantly. These three kinds of enterprises networks extend in East Asian, and compete and cooperate with each other, hence forming the micro-features of regional production networks in East Asia.The running of regional production networks describes the new appearances of East Asia. On the global level, it changes the concept of"Workshop of the World". Traditionally, this phrase means one powerful country, but now, it should be quoted as one region. The close relation of production and trade in East Asia causes collective trade surpluses against USA. On the regional level, the forming and developing of production networks pushes the regionalization process in Asia, and impels it from market-driven to institution-driven. On the country level, the production networks help the Asian economies to achieve economic growth. It turns out to be a necessary way for the developing economies to join the networks if they would like to realize industries upgrade.China earns rapid development through the interaction with the East Asian production networks. On the macro-level, East Asia is the main source of FDI and import. A spectacular triangle trade pattern has emerged among East Asia, China and EU-USA. On the micro-level, the Chinese enterprises face the technology barriers on the Producer-driven networks, and the entrance barriers on the Buyer-driven networks, thus, it'll be difficult for them to upgrade. On the whole, it'll be necessary for China to take some policies and measures if she wants the Chinese enterprises to successfully upgrade to the up-stream of value chains, and move to the core position of regional production networks.