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Global Supply Chain

by
November 9, 2009

2009.10.30.GlobalSupplyChain

Over the last decade, Asia has developed into a major manufacturing base for the developed world. This relationship has provided mutual benefits: the West has received cheap goods while the East has developed its production capacity more quickly. China, to a significant extent, has been the assembler nation, importing raw materials and intermediate products from the rest of Asia and exporting finished products to the West. This relationship is illustrated in the chart above, which plots China’s imports from Asia and its exports to the U.S. and Europe since January 2000. Recently, however, this relationship has weakened slightly — China is providing more demand for Asian exports than the West is providing for Chinese exports. An important question is whether the strong Asian recovery can continue without a robust recovery in Western demand for Chinese goods.

Economist: Special Report on China and America
Expert Brief: Why China May Stumble
CFR Meeting: The U.S. Chinese Economic Relationship
Jung-a, Anderlini: China Demand Drives Growth for South Korea

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  • Posted by Animesh Ghoshal

    This is a very interesting relationship. It is, however, not clear from what is presented that China is importing inputs from the rest of Asia and exporting finished goods to the West. Some, at least, of China’s exports to the US are intermediate products (e.g., camshafts for tractors).

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