China and the Asian Economies

The objective of this article is to explore the economic relationship between China and the surrounding dynamic Asian economies. It delves into China's influence over the Asian economies and whether this relationship has evolved in a market- and institution-led symbiotic manner. The three principal channels of regional integration analyzed in this article are trade, FDI and vertically integrated production networks. Another issue that this article explores is the so-called China ‘threat’ or ‘fear’ in Asia. The China threat implied that China was crowding out exports from the other Asian economies in the world market place. Also, as China became the most attractive FDI destination among developing countries, it was understood that China was receiving FDI at the expense of the Asian economies. These concerns were examined by several empirical studies and the inference was that they were exaggerated. The article concludes that China methodically expanded and deepened its economic ties with its regional neighbors. At the present juncture, China's integration with the surrounding Asian nations is deep. Both China and its dynamic Asian neighbors have benefited from this synergy. Notes 1. Dilip K. Das, Asian Economy: Spearheading the Recovery from the Global Financial Crisis (London and New York: Routledge, 2011). 2. Naoyuki Shinohara, ‘Leading the global recovery: policy challenges facing Asia’, presentation made at the Singapore National University, Singapore, 9 June 2010. 3. Wang Zhengyi, ‘Conceptualizing economic security and governance: China confronts globalization’, The Pacific Review 17(4), (2004), pp. 523–545. 4. Dilip K. Das, ‘China: epitome of an emerging market’, Journal of Emerging Knowledge on Emerging Markets 3(1), (2011b), pp. 57–81. 5. ASEAN-Plus-Three (APT) comprises the ten members of ASEAN, plus China, Japan and Korea. 6. William W. 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Prem-chandra Athukorala, Asian Trade Flows: Trends, Patterns and Projections, Working Paper No. 2011/05 (Canberra: Australian National University, March 2011). 36. Yong Fong Kong and Richard Kneller, ‘China's export expansion: a threat to its Asian neighbors?’, paper presented at the conference on Trade, Investment and Production Networks in Asia at the University of Nottingham, Kuala Lumpur Campus, Malaysia, 15–16 February 2012. 37. Athukorala, ‘Asian trade and investment’, pp. 11–57. 38. Loren Brandt, Thomas G. Rawski and X. Zhu, ‘International dimension of China's long-term boom’, in W. W. Keller and T. G. Rawski, eds, China's Rise and Balance of Influence in Asia (Pittsburgh, PA: The Pittsburgh University Press, 2007), pp. 14–46. 39. Charles Kramer, ‘Asia's investment puzzle’, Finance and Development 43(2), (2006), pp. 38–46. 40. Dilip K. Das, ‘Foreign direct investment in China: its impact on the neighboring Asian economies’, Asian Business and Management 6(3), (2007), pp. 285–302. 41. The source of these statistical data is Table 2.3.1 in Asian Development Bank (ADB), Asian Development Outlook 2011 (Manila, The Philippines: ADB, 2011), p. 66. 42. Busakorn Chantasasavat, K. C. Fung, Hironi Lizaka and Alan Siu, ‘The giant sucking sound: is China diverting foreign direct investment from other Asian economies?’, Asian Economic Papers 3(3), (2005), pp. 122–140. 43. Yuping Zhou and Sanjaya Lall, ‘The impact of China's FDI surge on FDI in South-East Asia: panel data analysis for 1986–2001’, Transnational Corporations 14(1), (2005), pp. 41–65. 44. Ianchovichina and Walmsley, ‘Impact of China's WTO accession on East Asia’. 45. Benoit Mercereau, FDI Flows to Asia: Did the Dragon Crowd out the Tigers?, Working Paper No. WP/05/189 (Washington, DC: International Monetary Fund, 2005). 46. Chantasasavat et al., ‘The giant sucking sound’. 47. Barry Eichengreen and Hui Tong, ‘Is China's FDI coming at the expense of other countries?’, Journal of Japanese and International Economics 21(1), (2007), pp. 153–172; and Chengang Wang, Yingqi Wei and Xiaming Liu, ‘Does China rival its neighboring economies for inward FDI?’, Transnational Corporations 16(3), (2007), pp. 35–60. 48. Warwixk J. McKibbin and Wing Thye Woo, ‘The consequences of China's WTO accession on its neighbors’, Asian Economic Papers 12(2), (2003), pp. 1–38. 49. Nimesh Salike, ‘Investigation of the “China effect” on crowding out of Japanese FDI: an industry level analysis’, China Economic Review 21(3), (2010), pp. 582–597. 50. C. Chen, Foreign Direct Investment in China (Cheltenham: Edward Elgar, 2012). 51. Dilip K. Das, Asian Economy and Finance: A Post-Crisis Perspective (New York: Springer Publications, 2005)

China · Crowding out · Development economics · Economics · Economy · Financial crisis · Foreign direct investment · Globalization · International trade · Macroeconomics · Market economy · Political science · World economy · Global Financial Crisis and Policies · Global trade and economics · International Development and Aid

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