China-ASEAN Trade Relations : A Discussion on Complementarity and Competition 9812303642

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CHINA–ASEAN TRADE RELATIONS

Reproduced from CHINA-ASEAN TRADE RELATIONS: A Discussion on Complementarity and Competition by Chen Wen and Liao Shaolian (Singapore: Institute of Southeast Asian Studies, 2005). This version was obtained electronically direct from the publisher on condition that copyright is not infringed. No part of this publication may be reproduced without the prior permission of the Institute of Southeast Asian Studies < http://bookshop.iseas.edu.sg >.

The Institute of Southeast Asian Studies (ISEAS) was established as an autonomous organization in 1968. It is a regional research centre for scholars and other specialists concerned with modern Southeast Asia, particularly the many-faceted problems of stability and security, economic development, and political and social change. The Institute’s research programmes are the Regional Economic Studies (RES, including ASEAN and APEC), Regional Strategic and Political Studies (RSPS), and Regional Social and Cultural Studies (RSCS). The Institute is governed by a twenty-two-member Board of Trustees comprising nominees from the Singapore Government, the National University of Singapore, the various Chambers of Commerce, and professional and civic organizations. An Executive Committee oversees day-to-day operations; it is chaired by the Director, the Institute’s chief academic and administrative officer.

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CHINA–ASEAN TRADE RELATIONS

A Discussion on Complementarity and Competition

Chen Wen Liao Shaolian

First published in Singapore in 2005 by ISEAS Publications Institute of Southeast Asian Studies 30 Heng Mui Keng Terrace Pasir Panjang Singapore 119614 E-mail: [email protected] Website: bookshop.iseas.edu.sg This book is published under the ASEAN-China Study Programme funded by Professor Saw Swee-Hock. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Institute of Southeast Asian Studies. © 2005 Institute of Southeast Asian Studies, Singapore ISEAS Library Cataloguing-in-Publication Data Chen Wen. China-ASEAN trade relations : a discussion on complementarity and competition. 1. China—Commerce—Southeast Asia. 2. Southeast Asia—Commerce—China. 3. Free trade—China. 4. Free trade—Southeast Asia. I. Title. II. Liao, Shaolian. HF3790.8 Z7C5C51 2005 ISBN 981-230-364-2 Typeset by Superskill Graphics Pte Ltd Printed in Singapore by Seng Lee Press Pte Ltd

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CONTENTS

I

Introduction

1

II

Literature Review

3

III

Bilateral Trade Relations between China and ASEAN

6

IV

Competition in the Third Market

16

V

Analysis of the Complementarity

35

VI

Prospects of Trade Relations

42

Appendix 1 Commodity Structure of the Bilateral Trade between China and ASEAN-5 in 2003 (%)

44

Appendix 2 Composition of the Bilateral Trade between China and ASEAN-10 at SITC 1-Digit and 2-Digit Levels (2003)

46

Appendix 3 Intra-Industry Trade Indices and Contribution of the Bilateral Tade between China and ASEAN-5 at HS 2-Digit Level

50

Appendix 4 Revealed Comparative Advantage Index (RCA) of China and ASEAN-5 Countries (2001) 54 Notes

68

References

73

The Authors

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Introduction

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I INTRODUCTION

The trade relationship between China and ASEAN is deep-rooted on account of history, geography, and past migration in the region (see Wong 1984, 1987). But the trade relationship was full of twists and turns during the 1950s, 1960s and 1970s because of political and ideological reasons. With the normalization of bilateral diplomatic relations and China’s adoption of the opening up and reform policies, trade relations have since been growing steadily. The past two decades or so have also seen dramatic changes in trade commodities between China and the ASEAN countries. In November 2002, leaders of China and ASEAN members signed the “Framework Agreement on Comprehensive Economic Cooperation between ASEAN and China”, which provides the groundwork for the eventual establishment of the China–ASEAN Free Trade Area by 2010 for the older ASEAN members and 2015 for the newer members. In January 2004, the “Early Harvest” for some agricultural products came into force. The bilateral trade relationship between China and ASEAN improved substantially during the last two years. Considering China’s strong economic growth and its increasing role in the world economy, ASEAN countries are more cautious about China’s presence. In order to promote mutual understanding, to continuously search for new fields and ways for cooperation, and to find possible approaches to attaining a propitious outcome of the competition, and ways to ameliorate adverse effects of the rivalry, it is essential to conduct

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in-depth study of the trade relations between China and ASEAN, which will have a great impact on the overall China–ASEAN relationship in the future. This work will first offer a literature review on China–ASEAN trade relations and then describe the development process of bilateral trade relations between China and ASEAN. The focus of the research will be on the analysis of trade competition and complementarity respectively. The prospects for trade relations between China and ASEAN are discussed at the end of the study.

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Literature Review

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II LITERATURE REVIEW

Due to China’s ongoing opening up and reform policies and its intention of stepping up its industrialization programmes, the ASEAN countries began to pay more attention to their economic relations with China, among which trade relations became the focus of attention. As early as 1984, John Wong published The Political Economy of China’s Changing Relations with Southeast Asia. In the second half of the 1980s, a three-year research project on “ASEAN–China Economic Relations” was jointly conducted by the Institute of Southeast Asian Studies in Singapore and the Institute of World Economy and Politics of the Chinese Academy of Social Sciences in China. As an outcome of the project, three books were published. The earlier studies found that China and ASEAN were not major trading partners with each other, with very limited shares of bilateral trade in their total trade. Primary goods such as traditional foodstuffs and light manufactures (various kinds of household utensils and tools, garments and textiles) were their major export commodities. But people began paying attention to the potential export competition between China and ASEAN. ASEAN was facing the challenge of a rapidly industrializing China, which not only exported in large quantities its low-priced manufactured products1 to the ASEAN market, but also competed indirectly in third-country markets, which was regarded as a more serious threat to ASEAN (Wong 1984 and 1987). China would likely be considered as a direct competitor for

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manufactured exports in the major developed countries, that is, the United States, Japan and European markets. Regarding the export competition between China and ASEAN, some surveys have been made from different perspectives. For example, Herschede (1991) studied the changing pattern of export competition between China and ASEAN2 for products at the SITC 1-digit level with a focus on the Japanese market over the period 1982–87, while Voon (1998) studied the degree of export rivalry and competition between China and individual ASEAN countries in four product groups3 in the U.S. market during the periods 1982–86 and 1990–94. Because ASEAN is by no means a homogeneous grouping, Chang, et al. (1997) examined the export competition between China and each of the ASEAN-54 in the U.S. and European markets during 1980–94. Some scholars found that “Thailand no longer enjoys a competitive edge in exports over China (at least in the U.S. market)” and “China has lagged behind Malaysia in export performance by a big margin”.5 Unlike others, Tyers et al. (1987) only focused on LIM6 export competition between China and each of the ASEAN-5 and examined the respective patterns of comparative advantage. They found that “the considerable expansion of the ASEAN share of U.S. imports was substantially outpaced by China”7 and that “education and work-force skills will be decisive factors in future developments, and the most important ASEAN exports are likely to be manufactures and services that are relatively intensive in human capital and technology rather than labor-intensive”.8 As regards the complementarity between China and ASEAN, most studies only touch upon this issue when they pinpoint the competition, such as Chia and Cheng (1987), Wong and Chan (2003), and Chen (2003a). However, Noor and Pier (1997), Palanca

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Literature Review

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(1999) employed revealed comparative advantage index to analyse the complementarity. A general conclusion of the studies mentioned above is that the trade relationship between China and ASEAN is “dynamic”, with competition in a third market than complementarity in a mutual market or the world market. With the intention of pushing ahead into the territory of higher technology and capital-intensive industries and deeper integration into the world economy, there is great concern in ASEAN about the likelihood of encountering trade competition from China, not only in traditional commodities but also non-traditional manufactured goods. As most of the studies mentioned above analysed the trade relations by 1995, it is important to update the studies on trade relations between China and ASEAN, especially since great changes in China and ASEAN trade patterns have taken place during the past decade.

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III BILATERAL TRADE RELATIONS BETWEEN CHINA AND ASEAN

3.1 The Development of China–ASEAN Bilateral Trade Bilateral trade between China and Southeast Asian countries has grown tremendously since 1990. As shown in Table 3.1, the value of China’s merchandise trade with Southeast Asian countries was US$78.25 billion in 2003, up from US$7.05 billion in 1990, with an average annual growth rate of 20.35 per cent, 3.74 per cent higher that that of China’s total foreign trade. During the period, the momentum of bilateral trade has kept increasing except for the year of 1998 due to the Asian financial crisis. The China–ASEAN trade has increased spectacularly in recent years, with 31.60 per cent and 42.89 per cent growth rates for the years of 2002 and 2003 respectively, or 9.80 and 5.78 per cent higher than those of China’s total foreign trade. Since 1993, Southeast Asia has been China’s fifth largest trading partner for eleven years, after Japan, the United State, the EU and Hong Kong. Nowadays, ASEAN is China’s fourth biggest import source and the fifth largest export market. As for ASEAN, its share of trade with China grew from 2.13 per cent in 1990 to 4.22 per cent in 2000.9 China is currently ASEAN’s sixth largest trading partner. Table 3.2 presents that the shares of ASEAN-5 countries’ exports to China have increased a

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397658 445617 466854 533938 716102 1047352 1031014 1269955 1103480 1217046 1734132 1838541 2356845 3092547 6.40 6.20 5.50 5.82 5.92 7.04 6.82 6.95 6.01 6.24 6.96 6.91 7.24 7.05 306900 394381 441305 630458 716967 989544 1084861 1245634 1206920 1487121 2218095 2322931 3119745 4732688 5.75 6.18 5.48 6.06 6.20 7.49 7.81 8.75 9.00 8.97 9.85 9.54 10.57 11.46

Share Share Value in total Value in total (US China (US China $10,000) export $10,000) import (%) (%)

China’s import from Southeast Asia

90758 51236 25549 –96520 –865 57808 –53847 24321 –157440 –270075 –483963 –484390 –762900 –1640141

Balance (US$10,000)

1.38 1.21 1.04 0.95 0.91 1.02 0.98 1.04 1.19 1.19 1.22 1.26 1.31 1.34

Trade intensity index10

1.12 1.18 1.12 1.24 1.32 1.50 1.26 1.41 1.17 1.23 1.61 1.59 1.90 2.19

China’s export a (%) 0.87 1.05 1.06 1.46 1.32 1.41 1.33 1.39 1.33 1.50 2.05 2.00 2.52 3.35

China’s import b (%)

Trade dependence

1.86 1.97 2.13 2.46 2.61 2.71 2.92 3.01 3.19 3.18 3.73

Share in S.E. Asia export (%)

S.E. Asia’s export to China

2.36 3.04 2.87 2.60 2.82 3.10 3.08 3.69 4.29 4.67 4.80

Share in S.E. Asia import (%)

S.E. Asia’s import from China

a Trade dependence measures the contribution of a country’s trade to its GDP. The export dependence here is the ratio of China’s export to Southeast Asia to China’s GDP. b The import dependence here is the ratio of China’s import from Southeast Asia to China’s GDP. Sources: China’s export and import values for 1990–2002 come from Yearbook of Foreign Economic Relations and Trade of China, relevant years, while values for 2003 come from . Southeast Asian countries’ trade values with China come from IMF, Direction of Trade Statistics, Washington D.C.: International Monetary Fund, various editions. Southeast Asia countries’ total import values and the world import values come from WTO statistics database.

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Year

China’s export to Southeast Asia

TABLE 3.1 Bilateral Trade Indices between China and Southeast Asia Bilateral Trade Relations between China and ASEAN 7

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TABLE 3.2 Exports of ASEAN-5 to China (Percentage of their total exports)

Singapore Indonesia Malaysia Philippines Thailand

1980

1985

1990

1995

2000

2002

2003

1.6 0.0 1.7 0.8 1.9

1.5 0.5 1.0 1.8 3.8

1.5 3.2 2.1 0.8 1.2

2.3 3.8 2.6 1.2 2.9

3.9 4.5 3.1 1.7 4.1

5.5 5.1 5.6 3.9 5.2

7.0 7.4 10.8 12.0 7.1

Source: Prasad (2004), p. 8.

lot, up to over 7 per cent in 2003, with 12.0 per cent for the Philippines and 10.8 per cent for Malaysia. The trade relationship between China and ASEAN is becoming closer and closer, as China’s economy becomes more open and more deeply integrated with the world economy. With respect to the share of ASEAN in China’s total foreign trade, it was 9.19 per cent in 2003, compared with 6.10 per cent in 1990. Meanwhile, the ratio of China’s trade dependence on ASEAN increased from 1.99 per cent to 5.54 per cent during the period, which indicates that trade with ASEAN has increasing influence on the Chinese economy. Besides, the trade intensity indices were over unity during the period 1990 to 2003 except for the years 1993, 1994 and 1996.

3.2 The Structure of Bilateral Trade Statistics on bilateral trade between China and ASEAN-10 in 2003 show that manufactured goods (excluding SITC 68) account for the major part of the bilateral trade, with 82.14 per cent for export and 74.70 per cent for import (see Table 3.3). Machinery and transport equipment account for over 50 per cent of the total bilateral trade, of which 85.61 per cent were electrical and

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SITC

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48.13 35.38 0.16

17.70 6.88 0.71 8.29 1.82 82.14 7.55 26.46 11.82

547,238 212,793 21,891 256,347 56,207 2,540,216 233,393 818,258 365,429 1,488,565 1,094,106 5,094

100.00

Share (%)

3,092,547

Value

China’s export

2,536,554 235,1971 3,941

1,193,267 251,262 298,940 561,828 81,237 3,535,483 562,844 436,085 54,553

4,732,688

Value

53.60 49.70 0.08

25.21 5.31 6.32 11.87 1.72 74.70 11.89 9.21 1.15

100.00

Share (%)

China’s import

Note: The trade data are based on the report by China. Source: Calculated according to the trade data downloaded from .

All products 0 to 9 Resource-based commodities 0 to 4+68 All food items 0+1+22+4 Agricultural raw material 2–22–27–28 Fuels 3 Ores and metals 27+28+68 Manufactured goods 5 to 8–68 Chemical products 5 Light manufactured goods 6+8–68 Textile and apparel 65+84 Machinery and transport equipment 7 Electrical and electronics products 75+76+77 Unallocated goods 9

Commodity

4,025,119 3,446,077 9,035

1,740,505 464,055 310,831 818,175 137,444 6,075,699 796,237 1,254,343 419,982

7,825,235

Value

51.44 44.04 0.12

22.24 5.93 4.10 10.46 1.76 77.64 10.18 16.03 5.37

100.00

Share (%)

Total trade

TABLE 3.3 Commodity Structure of the Bilateral Trade between China and ASEAN-10 in 2003 (in US$10,000)

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electronics products. Where the individual ASEAN countries are concerned, the shares of electrical and electronics products in China’s import from the Philippines and Malaysia are extraordinarily high, with 88.17 per cent and 61.13 per cent respectively (see Table 3.4). In addition, China’s trade with the ASEAN countries is by no means balanced. Though 83.11 per cent of China’s export products to Laos are machinery and transport equipments, the share of Laos in ASEAN-10’s import from China is only 0.55 per cent (see Table 3.4 and Table 3.5). It can be learned from Table 3.3 that light manufactured goods are still very important in terms of China’s exports to ASEAN countries, as it ranks as the second largest category in China’s exports. 26.46 per cent of China’s export products are light manufactured goods. The share of textile and apparel in China’s exports to ASEAN-10 is 11.82 per cent, whereas the share in China’s imports from ASEAN-10 is very minimal, only 1.15 per cent. As shown in Table 3.5, about one-third of China’s textile and apparel exports to ASEAN-10 goes to Singapore and two-fifths of China’s textile and apparel imports from ASEAN-10 comes from Indonesia. What’s more, more than 70 per cent of China’s exports to Cambodia is from textile and apparel, but the share of Cambodia in ASEAN-10 imports from China is but 5.65 per cent (see Table 3.4 and Table 3.5). In the resource-based commodities category, the share of China’s exports of agricultural raw material is only 0.71 per cent, smaller compared to 6.32 per cent import share (see Table 3.3). In addition, the value of China’s import of fuels is more than twofold its exports. It seems that ASEAN is China’s important source for resource-based commodities. If the individual ASEAN countries are taken into consideration, among the ten countries, Indonesia, Thailand and Malaysia are China’s first three import sources for

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Malaysia Philippines Singapore Thailand Brunei Vietnam Cambodia Laos

Myanmar

11

16.61 0.62 0.21 14.73 1.05 83.17 20.69 12.00 4.13 1.87 1.92 4.08 87.65 11.56 24.74 4.89 11.14 8.09 0.62 75.26 15.07 10.27 8.32 0.09 0.21 1.65 89.70 4.34 99.96 0.00 0.00 99.96 0.00 0.04 0.00 34.09 8.63 1.35 22.65 1.44 65.91 16.22 82.05 9.82 9.35 59.95 2.92 17.95 3.49 2.51 2.11 0.01 0.31 0.08 97.48 2.50 52.38 4.62 47.77 0.00 0.00 47.65 0.35

1.98 1.79 0.04 0.02 0.12 97.79 1.40

98.48 7.68 90.36 0.00 0.45 1.52 0.00

10.64 94.50 5.19 13.98 0.15 72.67 5.03 0.01 0.27 7.84 87.27 5.50 8.25 0.50

a: The commodity composition is the same as that in Table 3.3. Note: “Export” and “import” refer to China’s export to individual ASEAN countries and China’s import from individual ASEAN countries respectively. Source: Calculated according to the trade data downloaded from .

0.00 0.00

12.80 2.46 0.33 8.44 1.57 87.20 3.12

15.64 49.83 61.13 32.09 88.17 48.88 44.25 40.00 43.42 36.18 0.04 5.41 2.61 2.44 0.00 40.39 0.00 9.31 0.01 0.00 0.11 0.01 0.01 0.00 0.22 0.35 0.00 0.00 0.00 0.01 0.00 0.01 0.00 0.26 0.00 2.10

6.98 1.97 0.33 0.94 3.74 93.00 0.74

0.01

20.60 9.17 0.09 9.29 2.04 79.39 7.69

17.58 58.62 63.51 41.73 89.25 58.85 53.20 52.07 47.48 43.44 0.04 20.51 5.16 11.23 0.04 83.11 0.00 43.29

21.52 8.50 5.23 6.81 0.98 78.4 8.56

5.00 0.09

12.78 10.65 0.29 0.83 1.01 87.2 5.25

18.04 23.34 6.30 29.96 3.03 25.22 9.28 24.02 12.72 41.93 0.00 29.18 9.31 83.75 47.27 13.28 1.52 35.73 3.83 7.72 0.52 11.34 0.21 13.72 0.57 8.70 3.76 17.00 0.00 15.28 2.32 70.06 13.31 7.46 0.89 16.71

49.85 9.31 16.52 20.23 3.79 50.14 14.52

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

export import export import export import export import export import export import export import export import export import export import

Indonesia

All products 100.0 Resource-based commodities 28.18 All food items 10.75 Agricultural raw material 1.19 Fuels 14.19 Ores and metals 2.05 Manufactured goods 71.44 Chemical products 10.12 Light manufactured goods 25.45 Textile and apparel 9.44 Machinery and transport equipment 35.87 Electrical and electronics products 15.77 Unallocated goods 0.38

Commoditya

TABLE 3.4 Commodity Structure of the Bilateral Trade between China and ASEAN Countries in 2003 (%)

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Malaysia Philippines Singapore Thailand Brunei Vietnam Cambodia Laos

Myanmar ASEAN 10

12

3.69 4.93 0.70 1.06 29.02 16.59 0.82 20.74 10.26 13.22 29.20 24.81 30.44 11.87 14.60 2.58 0.75 27.49 13.54 24.66 38.54 8.39 7.44 32.63 2.87 27.75 13.21 18.96 18.30 17.17 32.89 12.71 6.78 18.79 23.64 0.06 0.13 0.01 0.00 0.10 0.12 0.06 2.62 0.00 0.00 5.56 0.00 0.00 0.00 19.80 12.90 19.66 28.09 8.17 8.25 22.09 10.01 5.69 4.56 15.53 5.24 0.74 0.90 0.14 0.29 0.01 0.04 0.04 1.13 0.32 0.11 0.05 0.42 0.00 0.00 0.04 0.00

1.57 0.16 0.07 0.00 0.35 0.00 0.06 0.00

3.82 27.97 36.35 9.08 23.64 39.62 19.72 14.00 16.29 0.11 0.00 1.40 0.47 38.39 0.69 1.27 0.69 58.84 24.46 0.10 0.00 0.00

a: The commodity composition is the same as that in Table 3.3. Note: “Export” and “import” refer to China’s export to individual ASEAN countries and China’s import from individual ASEAN countries respectively. Source: Calculated according to the trade data downloaded from .

4.38 0.30 0.22 0.00

3.98 24.19 35.02 8.67 22.19 35.06 21.99 13.39 16.52 0.10 0.00

23.78 17.52 20.22 11.33 4.38 27.33 22.30 11.24 25.74 0.17 0.00 11.33 3.11 3.02 0.28 40.33 12.97 13.29 9.60 2.36 33.29 10.99 9.12 26.15 0.16 0.00 13.29 6.20 5.65 0.63

11.65 13.33 1.33 11.22 11.24 9.67 10.20

1.34 0.94 4.12 0.00 1.64 0.03 0.01

100.0 100.0 100.0 100.0 100.0 100.0 100.0

100.0 100.0 100.0 100.0 100.0 100.0 100.0

2.64 0.00 100.0 100.0

3.96 0.19 100.0 100.0 4.15 0.03 100.0 100.0

1.76 2.21 0.65 1.78 0.43 3.12 3.21

2.94 0.36 100.0 100.0

China-ASEAN Trade Relations

0.36 0.00 0.77 0.00 100.0 100.0 0.49 0.00 37.34 0.00 100.0 100.0

0.55 0.00

0.16 0.00 0.20 0.20

0.09 0.03 0.34 0.00 0.01 0.00 0.00

0.04 0.08 0.02 0.00 0.02 0.38 0.06

25.23 47.31 24.46 16.95 16.94 31.00 21.26

24.02 21.29 31.77 20.70 26.84 8.15 14.83 14.35 30.73 8.22 1.99 11.08 21.08 13.81

0.32 0.02

12.15 19.86 29.55 10.00 13.32 28.68 22.15 12.38 18.65 0.11 0.66 10.28 3.08 0.95 0.05

export import export import export import export import export import export import export import export import export import export import export import

Indonesia

All products 14.49 Resource-based commodities 23.07 All food items 22.63 Agricultural raw material 2.25 Fuels 14.81 Ores and metals 16.36 Manufactured goods 12.60 Chemical products 19.42 Light manufactured goods 13.94 Textile and apparel 11.57 Machinery and transport equipment 10.80 Electrical and electronics products 6.46 Unallocated goods 33.45

Commoditya

TABLE 3.5 Market Structure of the Bilateral Trade between China and ASEAN Countries in 2003 (%)

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resource-based commodities. Although the bulk of China’s imports from ASEAN’s new members11 and Brunei are resource-based commodities (see Table 3.4), the share of these five countries in ASEAN-10 is less than 15 per cent (see Table 3.5).

3.3 The Recent Profile of the Bilateral Trade From recent China–ASEAN bilateral trade performance, some features can be depicted as follows: First, the bulk of the China–ASEAN trade is made up by the original ASEAN-5 members. The share of ASEAN-5 in the total bilateral trade between China and ASEAN-10 countries has been maintained at above 90 per cent over the period 1990 to 2003.12 Second, the commodity structure has changed a lot and presently manufactured goods is the major category. In terms of the commodity structure of the bilateral trade between China and the five original ASEAN members, there was a big shift during the 1985–2003 period. In 1985, bilateral trade concentrated on primary goods and goods not classified by kind (SITC 0 to 4 plus 9), while in 2003, the bilateral trade focused on manufactured goods (SITC 5 to 8, including SITC 68). As can be seen from Annex 1, the share of manufactured goods in the China–ASEAN-5 trade increased from 25.0 per cent in 1985 to 81.0 per cent in 2003. Meanwhile, the share of primary goods and goods not classified by kind declined from 75.0 per cent to 19.0 per cent over the same period. Third, China’s role as an export outlet is more important than that of an import source for ASEAN now (Chen 2003b; Wong and Chan 2003). Previously, China was much more important as a source of supply for ASEAN countries (Zhang and Hock 1996). But recently China’s import is growing rapidly, especially after China’s WTO accession. China is the third largest importer of developing countries’ exports after the United States and the

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European Union (Prasad and Rumbaugh 2003). Its imports from the Southeast Asian countries in 2003 amounted to 11.46 per cent of its total imports, up from 5.75 per cent in 1990. Table 3.1 shows that China’s trade balance was in deficit in 1993, and kept the momentum with the exception of 1995 and 1997. What’s more, the deficit amount has expanded since 1998, reaching US$16.4 billion in 2003, accounting for 20.96 per cent of the bilateral trade. In addition, China’s import dependence on ASEAN was 3.25 per cent in 2003, compared to the 2.19 per cent export dependence, but in 1990, China’s export dependence was higher than its import dependence. Furthermore, with deeper integration into the world economy, further reduction of tariff, and the ongoing economic growth, there is great potential for China’s imports, which will benefit the ASEAN countries which are rich in natural resources and exporting large quantities of electrical and electronics products. Fourth, in terms of structure of export commodities, the extent of concentration in the exports of ASEAN to China is more obvious than in the exports of China to ASEAN. Annex 2 shows that the share of China’s top five export products to ASEAN at the SITC 2-digit level was 50.24 per cent in 2003, while the share of China’s top five imports from ASEAN was 67.98 per cent, 17.74 per cent lower. In terms of the individual country, the shares of the SITC 75 and 77 divisions13 of the Philippine and Malaysian exports to China were as high as 86.21 per cent and 57.73 per cent respectively, and the shares of the SITC 33 division14 of Vietnamese and Brunei exports to China were 56.26 per cent and 99.96 per cent respectively. Meanwhile, cork and wood (SITC 24) constituted 65.54 per cent and 68.37 per cent of Laotian and Burmese exports to China respectively. As for Cambodia, cork and wood manufactures other than furniture (SITC63), crude rubber

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(SITC 23), cork and wood and textile yarn and fabrics (SITC 65) registered 94.50 per cent of its exports to China. Lastly, the extent of intra-industry trade for manufactured goods in the bilateral trade seems to have a trend of expansion (Chen, 2003b). Among 98 kinds of manufactured products in the bilateral trade between China and ASEAN-5, there were 62 kinds of products with a higher intra-industry index15 in 2002 than in 1996 (See Appendix 3). And the number of products with intraindustry index over 0.5 increased to 36 in 2002, compared to 32 in 1996. In 2002, the bilateral trade products with relatively high intra-industry index16 were fish (HS 03), other vegetable products (HS 14), sugars (HS 17), miscellaneous edible products (HS 21), pharmaceutical products (HS 30), cosmetics (HS 33), photographic goods (HS 37), printed books and newspapers (HS 49), glass and glassware (HS 70), jewellery (HS 71), iron and steel (HS 72), machinery and mechanical appliances (HS 84), electrical machinery and equipment (HS 85), vehicles other than railway/ tramway (HS 87), optical/medical instruments (HS 90), clocks and watches and parts thereof (HS 91). In addition, among 84 kinds of products with value of total bilateral trade increased over the period 1996 to 2002, the growth of 39 items were mostly attributed to the growth in intra-industry trade.17 If the value of trade is considered as well, it appears that the intra-industry trade occurred mainly in the machinery and electrical appliances sectors (HS 84 and 85).

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IV COMPETITION IN THE THIRD MARKET

China and ASEAN-418 belong to middle-income countries in the world.19 Due to the growth of the economy and upgrading of industrialization in the past two decades, China and ASEAN-4 show similar economic structures and levels of industrialization, with increasing shares of industrial value added in GDP. Nowadays, the share of agriculture in GDP for each of the five countries is less than 17 per cent (see Table 4.1) As Table 4.1 shows, China and ASEAN-5 are strongly dependent on third markets, for they adopt outward-looking development strategies which emphasize the export sectors. Also, due to similar resource endowment, there exists competition in certain economic fields, particularly in trade and foreign direct investment. Due to different levels of economic development and export volume of newer ASEAN members and limited data available, this section will focus only on the competition between China and the ASEAN-5 countries.

4.1 Similarities in Export Commodity Structure In terms of commodity group, electrical and electronic products is the highest export category for China and ASEAN-5 except Indonesia. The share of electrical and electronic products account for over 30 per cent of these countries’ total exports. Over half of the exports of the Philippines, Malaysia and Singapore in 2001 were electrical and electronic products. And light manufactured goods are still important to the six economies. Textile and clothing

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1,409,852 1,100 686,363 1,267 208,311 810 103,161 3,780 91,342 21,230 80,574 1,080 143,163 2,190 4,715 12,971 39,157 480 4,299 310 2,036 320 9,6051) 1791) 9.7 – 3.6 6.2 6.7 3.5 3.7 0.62) 7.6 6.6 6.3 7.4 9.1 5.0a 4.1 5.2 1.1 4.5 6.7 3.2a 7.2 7.6 5.0 5.11)

GDP GNI per GDP growth capita in growth 2003 1990–2002 in 2003 (%) (US$) (%)b

15.4 – 17.1 9.0 0.1 14.7 8.8 2.83) 23.0 35.6 50.94) 57.0 51.1 – 44.2 47.4 35.1 32.5 42.7 44.43) 38.5 28.0 23.44) 10.0

Agriculture Industry value value added added 33.5 – 38.7 43.6 64.8 52.8 48.0 52.73) 38.5 36.4 26.74) 33.0

Service value added 49.0 – 51.1 182.4 277.8 91.7 105.6 74.53) 101.3 94.9 43.4 1.53)

Trade in goods/ GDP ratio in 2002 (%)

33.0 – 31.2 111.4 – 48.3 64.3 – 55.55) 59.25) – –

Exports of goods and services/ GDP in 2003 (%)

a ASEAN Finance and Macroeconomic Surveillance Unit (FMSU) Database. b World Bank, 2004 World Development Indicators, Washington D.C., 2004. Notes: 1) Fiscal year beginning in April and ending in March of the following, 179 is Myanmar’s GDP per capita, from ASEAN Finance and Macroeconomic Surveillance Unit (FMSU) Database. 2) GDP growth rate during 1996–2002, calculated by GDP at current local currency at ASEAN secretariat, ASEAN Statistical Yearbook 2003, Jakarta: the ASEAN secretariat, 2003, p. 33. 3) Figures for 1998, from World Development Indicators 2003, CD-ROM. 4) Figures for 2001. 5) Figures for 2002. Sources: World Bank, World Development Indicators Database.

China ASEAN Indonesia Malaysia Singapore Philippines Thailand Brunei Vietnam Cambodia Lao, PDR Myanmar

Country

GDP in 2003 (US$ million current)

Structure of output (%) of GDP in 2002

TABLE 4.1 Indicators of China and ASEAN Countries Competition in the Third Market 17

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are major exports of China, Indonesia, the Philippines and Thailand (see Table 4.2). All in all, China and the ASEAN-5 countries have similar overall export structure. To measure the extent of similarity in export structures in greater detail, the Finger and Kreinin index20 is usually employed. Here, the Finger and Kreinin index and export data at SITC 3-digit level are used to examine the extent of export similarity. In order to smoothen out the impact of the fluctuations of the economy on trade, three-year-average data were adopted. Table 4.3 presents the export similarity indices between China and ASEAN-5 countries during the period between 1984 and 2001. The picture in Table 4.3 suggests that there has been a significant rise in overall export similarity between China and ASEAN-5 countries, although there has been some fluctuation. The compositions of China’s and Thailand’s overall exports are the most similar, while those of China and the Philippines are the least similar between 1999 and 2001. As far as manufactured goods are concerned, the similarities of export structures between China and ASEAN-5 countries have generally increased during 1984 to 2001, except that China and the Philippines’ export similarity decreased in the period 1999 to 2001. It is interesting to note that the composition of China’s exports in resource-based commodities became less similar to that of Indonesia and Malaysia between 1984 and 2001, whereas the composition of China’s exports in resource-based commodities became increasingly similar to that of Thailand and the Philippines. The similarity of exports of China and Singapore in resourcebased commodities remained constant over the period. In sum, we can conclude that the economic structures of China and the ASEAN-5 countries have become more similar over time.

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TABLE 4.2 Export Commodity Structure of China and ASEAN-5 Countries in 2001 (%) Commodity Groupa

China Indonesia Malaysia Philippines Singapore Thailand

All products Resource-based commodities All food items Agricultural raw material Fuels Ores and metals

100.0

100.0

100.0

100.0

100.0

100.0

11.14 5.34

43.27 8.88

18.90 6.05

8.81 5.57

11.45 2.28

22.33 15.36

0.89 3.16 1.75

3.59 25.35 5.45

2.11 9.72 1.02

0.52 0.85 1.87

0.43 7.59 1.15

3.11 2.79 1.07

Manufactured goods Chemical products Light manufactured goods Textile and clothing Machinery and transport equipment Electrical and electronic products

88.64 4.94

55.96 4.98

80.02 4.23

90.96 1.02

84.24 8.00

74.12 5.72

48.08 20.20

34.86 13.87

15.18 3.56

15.70 8.35

11.84 1.94

26.43 8.48

35.62

16.12

60.6

74.25

64.41

41.98

31.05

13.67

56.67

70.19

56.84

31.92

0.23

0.78

1.07

0.24

4.31

3.56

Unallocated goods

a The commodity composition is the same as that in Table 3.3. Source: UNCTAD Handbook of Statistics Database.

4.2 Comparative Advantage To analyse export competitiveness, the revealed comparative advantage (RCA) measure has been widely used. Developed by Balassa (1965, 1979), RCA21 is used to approximate the comparative advantage of a country in producing a certain category of product, which refers to the share of a commodity in total merchandise exports of a country divided by the commodity’s share in world merchandise exports. Recent examples of its use include Maule (1995), Palanca (1999), Ng and Yeats (1999), and Yue and Hua (2002).

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TABLE 4.3 Export Similarity Index between China and ASEAN-5 Countries Commodity

Year

Indonesia

Malaysia

Philippines Singapore Thailand

All products (0~9)

1984–1986 1989–1991 1994–1996 1999–2001

33.57 34.78 43.49 48.09

34.10 32.93 37.63 43.22

14.99 34.81 37.61 36.68

25.98 31.51 36.70 40.98

29.73 46.02 56.11 54.75

Resource-based commodities (0~4 plus 68)

1984–1986 1989–1991 1994–1996 1999–2001

45.08 40.93 37.16 34.40

39.77 33.01 31.00 29.45

15.43 27.68 33.15 37.04

22.69 21.89 29.28 27.31

25.87 32.60 38.25 48.07

Manufactured goods (5~8 less 68)

1984–1986 1989–1991 1994–1996 1999–2001

25.61 48.83 58.49 65.58

25.08 35.61 40.34 46.02

21.72 47.02 48.59 36.46

31.38 35.66 38.57 43.50

35.92 54.26 63.06 60.82

Source: Calculated according to the trade data from UNCTAD Handbook of Statistics Database.

If RCA indices of two countries for a certain product are all over unity, then both countries have comparative advantage in exporting the product to the world, which implies that these two countries probably compete with each other in the export of the product in the world market. Appendix 4 displays China’s and ASEAN-5 countries’ RCA indices at the SITC 3-digit level in 2001. Among 232 kinds of products, China competes with Thailand, Indonesia, Malaysia, the Philippines and Singapore in 48, 35, 18, 22 and 18 kinds of products respectively in 2001. From Appendix 4, we can see that China and Thailand compete mainly in fish and preparations thereof (SITC 03), vegetables and fruit (SITC 05), leather and leather manufactures (SITC 61), textile and clothing (SITC 65, 84), electrical and electronic products (SITC 75~77), furniture and parts thereof (SITC 82), travel goods (SITC 83), footwear (SITC 85) and photographic apparatus, watches and clocks (SITC 88). China

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and Indonesia compete with each other mainly in fish and preparations thereof (SITC 03), tea and spice (SITC 074, 075), textile and clothing (SITC 65, 84), non-metallic mineral manufactures (SITC 66), telecommunications and sound recording and reproducing apparatus and equipment (SITC 76), furniture and parts thereof (SITC 82), travel goods (SITC 83) and footwear (SITC 85). China and Malaysia as well as China and Singapore have comparative advantage simultaneously in office machines and automatic data processing machines (SITC 75) and telecommunications and sound recording and reproducing apparatus and equipment (SITC 76). In addition, China and Singapore also compete in photographic apparatus, watches and clocks (SITC 88). Whereas, China and the Philippines have export competition in office machines and automatic data processing machines (SITC 75), travel goods (SITC 83) and apparel and clothing (SITC 84).

4.3 Competition Analysis at Product Level According to the analysis in Sections 4.1 and 4.2, China and ASEAN-5 compete mainly in the categories of electrical and electronic products and textile and apparel. We will therefore conduct a deeper survey on these two categories. With regard to the United State as a major importer, we focus on the competition between China and ASEAN-5 countries in the U.S. market. According to Kwan (2003), the degree to which ASEAN competes with China in the U.S. market is high, for example, 83.5 per cent for Indonesia and 76.1 per cent for Thailand. Here we take the United States as a reporting country, and use 4-digit SITC trade data on U.S. imports from China, ASEAN-5 and the world. The data were drawn from USITC. The total export data of these countries were taken from the WTO database.

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TABLE 4.4 The Extent to which ASEAN-5 Members Compete with China in the U.S. Market (%)

Indonesia Malaysia The Philippines Singapore Thailand

1990

1995

2000

2002

85.3 37.1 46.3 14.8 42.2

85.5 38.9 47.8 19.2 56.3

82.8 48.7 46.1 35.8 65.4

83.5 54.5 57.0 44.2 76.1

Note: Based on U.S. import statistics (some 10,000 product categories of manufactured goods based on the 10-digit HS commodity classification system). Source: Kwan (2003).

4.3.1 Electrical and Electronic Products Electrical and electronic (EE) industry has made great advances in trade over the past two decades. The trade value and market share of the above-mentioned products in the world was US$2,567.74 billion and 20.43 per cent respectively in 2000, up from US$261.31 billion and 6.96 per cent in 1980.22 The industry plays an important role in the economic growth spurts of these countries, and the products account for a growing proportion of the exports of China, Malaysia, the Philippines and Indonesia to the U.S. market. More than half of the exports of Malaysia, the Philippines and Singapore to the U.S. market in 2003 were electrical and electronic products. About one-third of export products to the U.S. market from China and Thailand are EE products. Today, most of the major players in the industry concentrate in the Greater Pacific Basin, including the Asia Pacific (JETRO 1999). The industry remains a key industrial sector for China and ASEAN-5 in terms of output, employment and export.23 The United States is the largest market in the world for EE products, its

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75–77 6.94 75 5.43 76 13.49 77 5.31

75–77 75 76 77

1996

2003

Share in U.S. market (%)

Share in national export to the U.S. market (%)

8.82 12.37 9.14 5.06 2.28 2.49 2.86 1.59

2.65 3.27 2.31 2.25 2.53 2.32 0.47 4.50

2.57 1.35 2.02 3.90

Source: Computed according to the data from USITC.

22.74 29.51 24.10 14.95

7.69 5.78 11.71 7.54 4.09 9.06 0.87 2.00

9.74 19.66 2.09 4.46 0.78 0.56 1.26 0.58

0.89 0.31 2.67 0.43 33.32 14.90 10.70 7.72

22.82 6.74 8.60 7.48 80.53 38.92 25.31 16.30

75.04 21.31 22.17 31.55 33.90 12.72 12.86 8.31

40.16 18.74 6.80 14.62

57.60 18.20 3.28 36.13

54.21 10.73 8.25 35.23

63.18 48.21 4.07 10.90

84.39 64.32 3.52 16.55

18.09 4.46 8.91 4.72

16.77 2.39 10.61 3.77

China Malaysia Thailand Philippines Singapore Indonesia China Malaysia Thailand Philippines Singapore Indonesia

SITC

Year

TABLE 4.5 Export Shares of EE Products to the U.S. Market

Competition in the Third Market 23

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China-ASEAN Trade Relations

imports registered US$277.17 billion or 20.55 per cent of the world market in 2000,24 over one-fifth share of the world. To analyse the export competition between China and ASEAN-5 countries in the U.S. market for EE products, shiftshare analysis25 which has been widely used, is employed here. It is to measure how export-competitive country j is in the U.S. market compared to the like export of a reference economy as a whole. The reference economy here comprises China, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The technique attributes the difference between the actual change in export and share effect to three possible sources of export divergence: Industrial structure effect, competitive effect and interactive effect. The mathematical exposition of the methodology can be found in Huff and Sherr (1967). Recent examples of its use include Herschede (1991), Khalifah (1996), Voon (1998) and Wilson (2000). As shown in Table 4.6, during the period between 1996 and 2003, China experienced more export to the U.S. market both in electrical and electronic products as a whole and its sub-categories, while Thailand, Singapore and Indonesia registered less export, compared to the status if the competitor had the same industrial structure and growth as the reference economy. The stories of Malaysia and the Philippines were more complicated. In contrast with the reference economy, Malaysia gained more export in EE products as a whole and in SITC 75 and 76, while the Philippines only exported more in SITC 77. As indicated in Table 4.6, the increased exports of China in EE products as a whole and its subcategories and of Malaysia in SITC 75 were contributed by their strong competitive advantage in contrast with the reference economy, while the increased export of the Philippines in SITC 77 and of Malaysia in EE products as a whole and in SITC 76 were attributed to their favourable industrial structures in contrast

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with the reference. The decreased exports of Thailand, the Philippines, Singapore and Indonesia in EE products as a whole were mainly due to their competitive disadvantage compared to the reference economy over the period. As far as the sub-categories are concerned, the decreased exports of Thailand in SITC 75 and 77, Singapore in SITC 76 and 77, the Philippines in SITC 76, and Indonesia in SITC 76 were mostly because of their competitive disadvantage in contrast with the reference economy, whereas those for Thailand in SITC 76, the Philippines in SITC 75, and Indonesia in SITC 75 and 77 were due to their unfavourable industrial structures compared to the reference economy. Only less exports of Malaysia in SITC 77 and of Singapore in SITC 75 arose from poor interactive effect due to specialization in the sectors with positive industrial structure but with competitive disadvantage, compared to the reference economy. The above empirical results show that for the EE products as a whole, China enjoyed competitive advantage but unfavourable export structure in the U.S. market, while Malaysia, Singapore and the Philippines possessed competitive disadvantage but had favourable export structure, and Thailand and Indonesia suffered both competitive disadvantage and unfavourable export structure during 1996 to 2003, in contrast with the reference economy. If we look at the SITC 4-digit level,26 there were 44, 17, 16, 20, 6 and 28 kinds of products gaining competitive advantage in the U.S. market for China, Malaysia, Thailand, the Philippines, Singapore and Indonesia respectively over the period 1996–2003, compared to the reference economy. The competitive situations go with the changes of the shares in the U.S. market for EE products during the period 1996–2003. China’s export share in the U.S. market for EE products has shown a tremendous rise from 6.94 per cent in 1996 to 22.74 per cent in 2003, and Malaysia made

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41985903080 20660209589 12792958119 8532735372

7337231285 6287475721 2565469254 –1515713690

721003216 –162046495 1269113298 –386063587

Malaysia 75–77 75 76 77

Thailand 75–77 75 76 77

Actual Change

China 75–77 75 76 77

SITC

1

26

4262706023 2133994207 1563817835 564893981

6622806132 3315506591 2429644994 877654547

19657682311 9841021159 7211624267 2605036885

Share Effect

–3541702807 –2296040702 –294704537 –950957568

714425153 2971969130 135824260 –2393368237

22328220769 10819188430 5581333852 5927698487

Difference

–410346616 –108753082 –470305742 –13117676

4560217216 262338998 3111497330 972530298

–9561734719 –6482611755 –828785043 –1303406491

Industrial Structure Effect

–3464902800 –2304742409 251125064 –960135666

–2277553615 2510951448 –1304754283 –1596649200

62092498814 50698816381 7242446089 14472076916

Competitive Effect

Source of difference

TABLE 4.6 Results of the Shift-Share Analysis for the Period 1996–2003 (in US$)

333546609 117454789 –75523860 22295773

–1568238447 198678684 –1670918787 –1769249335

–30202543326 –33397016196 –832327194 –7240971938

Interactive Effect

26 China-ASEAN Trade Relations

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27

–7637672151 –5812899769 –96750867 –1728021515

392470377 249189302 –12680047 155961122

Singapore 75–77 75 76 77

Indonesia 75–77 75 76 77

–1629658659 –537926695 –1483127899 391395935

3158652845 1581283541 1158784497 418584808 –2766182468 –1332094239 –1171464544 –262623686

7460173298 –15097845449 3734709012 –9547608781 2736841808 –2833592675 988622479 –2716643994

3069719589 1536761809 1126158411 406799369

–1966874845 –1390183448 106444807 –313289194

6706494187 8429107662 –1746386275 104376494

675104788 –702126936 –170204228 550787031

–2118461071 480667014 –1170397761 201412114

–11482174796 –5519468659 –3004185277 –2551625698

–1889268171 302331795 –1546685041 –67712112

1319153448 –422577804 –107511590 –150746605

–10322164840 –12457247784 1916978876 –269394789

–415495276 –138131554 233761370 –91678984

Note: SITC 75 refers to office machines and automatic data processing machines. SITC 76 is the category of telecommunications and sound recording and reproducing apparatus and equipment. SITC 77 denotes electrical machinery, apparatus and appliances, n.e.s., and electrical parts thereof. Source: Computed from USITC.

1440060930 998835114 –356969488 798195304

Philippines 75–77 75 76 77

Competition in the Third Market 27

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a minimal increase from 7.68 per cent to 8.82 per cent, whereas Singapore suffered a big decrease from 9.74 per cent down to 4.09 per cent. As for Thailand, the Philippines and Indonesia, the export share remained almost the same (see Figure 4.1 and Table 4.5). This indicates that competitive pressure was put on Singapore by China’s increasing exports. As regards the export structure of the EE products, the extent of similarity in export structures between China and ASEAN-5 countries increased at different levels. Table 4.7 shows that the extent of structure similarity between China and Malaysia in EE product exports to the U.S. market was greatest during 1996 and 2003, and ranked the highest in 2003. The extent of EE export similarity between China and Thailand registered the second highest, followed by that between China and Indonesia. The extent of EE export similarity between China and Singapore was the lowest.

4.3.2 Textile and Apparel Textile and apparel is also an important export sector to China, Indonesia, the Philippines and Thailand. The textile and apparel industry was once the engine of growth of the above economies in the 1980s. From Table 4.8, we can see that the share in the U.S. market has increased for China and Thailand, while it declined for Malaysia, the Philippines and Singapore in 2003, compared to 1996. As for the share in national exports to the U.S. market, China and Malaysia experienced drops, whereas Thailand, the Philippines, Singapore and Indonesia registered increases over the period. According to the shift-share analysis results shown in Table 4.9, during the period 1996 to 2003, China experienced more export to the U.S. market both in textile and apparel as a whole

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29

Share (%)

1996 1997

Source: Computed from USITC.

0

5

10

15

20

25

1998 1999 2000 Year 2001

2002

2003

FIGURE 4.1 Export Shares of EE Products in the U.S. Market

Singapore Indonesia

China Malaysia Thailand Philippines

Competition in the Third Market 29

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TABLE 4.7 Export Similarity Index for EE Products between China and ASEAN-5 Countries in the U.S. Market Year

Indonesia

Malaysia

Philippines

Singapore

Thailand

1996

43.43

48.54

29.52

32.33

49.00

2003

50.09

60.66

34.50

33.84

52.69

Source: Calculated according to the trade data from USITC.

and in the sub-categories of textile yarn and fabrics (SITC 65) and apparel and clothing accessories (SITC 84), while Malaysia, the Philippines and Singapore experienced the opposite, compared to the status if the competitor had the same industrial structure and growth as the reference economy. Indonesia and Thailand present a complicated situation. In contrast with the reference economy, Indonesia and Thailand gained more exports in the overall products and apparel and clothing accessories, but lost export volume in textile yarn and fabrics. As indicated in Table 4.9, the decreased exports of Malaysia and Singapore in both textile and apparel as a whole and its sub-categories were attributed to their competitive disadvantage and unfavourable industrial structure as well, compared to the reference economy over the period. The increased exports of China and Thailand in apparel and clothing accessories were mainly attributed to their strong competitive advantage in contrast with the reference economy, while the increased exports of Thailand in textile and apparel as a whole and Indonesia in apparel and clothing accessories were mainly due to their favourable industrial structure in contrast with the reference economy. In addition, the increased exports of China in textile yarn and fabrics and Indonesia in the overall products all came from the contribution of favourable industrial structure compared to the reference economy.

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65+84 14.28 65 10.26 84 15.27

65+84 17.47 65 19.85 84 16.86

1996

2003

Share in U.S. market (%)

Share in national export to the U.S. market (%)

2.91 2.77 3.20

2.73 1.85 2.95 2.33 0.63 2.77

3.13 0.72 3.72

Source: Computed according to the data from USITC.

1.48 0.38 1.76

2.54 0.70 2.99 0.32 0.01 0.40

0.64 0.02 0.79 2.85 1.00 3.33

3.12 1.44 3.53 9.58 2.22 7.36

14.17 2.01 12.16 5.05 0.27 4.78

7.48 0.41 7.07 16.15 2.00 14.15

12.52 1.67 10.85

19.91 1.09 18.82

19.88 0.90 18.98

1.84 0.01 1.83

1.66 0.01 1.65

24.85 1.77 23.08

19.27 1.77 17.50

China Malaysia Thailand Philippines Singapore Indonesia China Malaysia Thailand Philippines Singapore Indonesia

SITC

Year

TABLE 4.8 Export Shares of Textile and Apparel to the U.S. Market

Competition in the Third Market 31

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7926700437 2526498983 5400201454

–48369677 –5607867 –42761810

1123667445 125104716 998562729

401206190 38008919 363197271

–58467473 –263448 –58204025

867593720 27649598 839944122

China 65 plus 84 65 84

Malaysia 65 plus 84 65 84

Thailand 65 plus 84 65 84

Philippines 65 plus 84 65 84

Singapore 65 plus 84 65 84

Indonesia 65 plus 84 65 84 667765212 362868433 379982543

1577142044 857030363 897450831

648963990 352651713 369283968

901171142 489702899 512798954

1400115732 760832988 796716460

4155795854 2258289442 2364798057

Share effect

Source: Computed from USITC.

Actual change

SITC1

199828508 –335218835 459961579

–1635609517 –857293811 –955654856

–247757800 –314642794 –6086697

222496303 –364598183 485763775

–1448485409 –766440855 –839478270

3770904583 268209541 3035403397

Difference

582449386 127036888 262809504

–1322577110 –851279851 –754114269

604690940 –1092464836 308113543

195173180 136690959 24812080

–382963491 –522668407 –252501220

1567546053 1219484447 414216900

Industrial structure effect

–204365644 –342388626 116545230

–1939373828 –896293469 –1261874604

–441276560 –297579268 –171286592

22459012 –391898392 439677633

–1466696862 –778747701 –859318599

1599888386 –617709531 2230494197

Competitive effect

Source of difference

TABLE 4.9 Results of the Shift-Share Analysis for the Period 1996–2003 (in US$)

–178255234 –119867097 80606845

1626341421 890279510 1060334018

–411172180 92201310 –142913647

4864111 –109390750 21274062

401174944 534975253 272341548

603470144 –333565376 390692300

Interactive effect

32 China-ASEAN Trade Relations

Competition in the Third Market

33

From the empirical results, we can find that in contrast to the reference economy, for textile and apparel as a whole and the apparel and clothing accessories sub-sector, both China and Thailand enjoyed competitive advantage and favourable export structure as well in the U.S. market, while Malaysia and Singapore suffered both competitive disadvantage and unfavourable export structure for the period of 1996 to 2003. Indonesia and the Philippines had favourable export structure but possessed competitive disadvantage in textile and apparel as a whole. If we look at the SITC 4-digit level,27 there were 71, 18, 41, 32, 22 and 39 kinds of products gaining competitive advantage in the U.S. market for China, Malaysia, Thailand, the Philippines, Singapore and Indonesia respectively over the period 1996–2003, compared to the reference economy. As far as the export structure of textile and apparel is concerned, the extent of similarity in export structures between China and ASEAN-5 countries increased by different extents. Table 4.10 shows that during 1996 and 2003, the extent of structure similarity between China and Malaysia, and between China and Thailand in the export of textile and apparel to the U.S. market was enhanced, while that between China and other ASEAN-5 countries decreased. In 2003, the extent of export similarity between China and Thailand was the highest.

TABLE 4.10 Export Similarity Index for Textile and Apparel between China and ASEAN-5 Countries in the U.S. Market Year

Indonesia

Malaysia

Philippines

Singapore

Thailand

1996

66.53

39.12

60.19

37.47

58.18

2003

56.95

42.71

58.42

23.60

62.28

Source: Calculated according to the trade data from USITC.

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The extent of export similarity between China and the Philippines ranked the second highest, followed by that between China and Indonesia. The extent of export similarity between China and Singapore was the lowest. So, Indonesia, Thailand and the Philippines face competition from China to some extent in textile and apparel.

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V ANALYSIS OF THE COMPLEMENTARITY

Though competition between China and ASEAN-5 in market expansion in the third country exists, their trade relationship has developed rapidly all these years, which is closely linked to their economic complementarity.

5.1 Complementarity in the Endowment of Natural Resources There is inherent certainty in the fast development of bilateral trade between China and ASEAN, and this is linked to the fact that both sides have their own strong areas in the endowment of natural resources. Concerning the commodity structure of the bilateral trade in 2003 (Table 3.3), the share of the resource-based commodities category accounted for 22.24 per cent. From Appendix 2, we can see that crude rubber (including synthetic and reclaimed), cork and wood, petroleum products and related materials, and fixed vegetable fats and oils are among China’s top ten commodities imported from ASEAN-10 under the SITC 2-digit level in 2003. These commodities accounted for 2.54 per cent, 2.14 per cent, 10.83 per cent and 3.35 per cent of China’s total imports from ASEAN-10 respectively. But if we look at the bilateral trade between China and ASEAN individual countries, we can see that besides the products mentioned above, cereals and cereal preparations is one of China’s top ten export commodities to Indonesia, Malaysia and the Philippines, and vegetables and fruit

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is among China’s top ten export commodities to Malaysia and Brunei. It is obvious that there exists complementarity in the endowment of natural resources between the two sides, such as tropical resources in Southeast Asia — palm oil, natural rubber and timber resource, and crops and fruits of temperate zone in China — maize, oil cake from rape, colza seeds, pear and apple. In addition, tropical fruit and vegetable products such as Philippine banana, coconut and pineapple, Thai civet durian and tapioca and its products, Vietnamese guava and Laotian locus beans are products that China imports in large quantities, while Chinese cereals, vegetables, and mineral products such as zinc, lead, etc. are what ASEAN countries need. Actually China is an important importer for primary products from Southeast Asian nations. In 2002, China was the biggest importer of Indonesian chemical wood pulp (HS 4703), paper and paperboard (HS 4810), Philippine refined copper (HS 7403), Malaysian palm oil and its fraction (HS 1511), animal or vegetable fats and oils (HS 1516), and natural rubber (HS 4001), Vietnamese natural rubber, Laotian locus beans (HS 1212) and natural rubber, Cambodian live fish (HS 0301), veneer sheets and sheets for plywood and other wood sawn lengthwise (HS 4408) and plywood, veneered panels and similar laminated wood (HS 4412), and Myanmar’s dried fruit (HS 0813) and wood sawn/chipped lengthwise (HS 4407). China was the second largest export market for Philippine bananas and plantains (HS 0803) and petroleum oils (not crude, HS2710), Vietnamese coal and solid fuels manufactured from coal (HS 2701) and crude petroleum oils (HS 2709), Laotian medicinal plants (HS 1211), wood in the rough (HS 4403) and wood sawn/chipped lengthwise, Cambodian crustaceans (HS 0306), natural rubber and wood sawn/chipped lengthwise,

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and Myanmar’s wood in the rough.28 With rapid economic development, China’s import demand for raw materials will grow bigger, so there is great potential in bilateral trade cooperation in this aspect between ASEAN and China.

5.2 Complementary Comparative Advantage of Manufactured Goods Though manufactured goods are the main export products of ASEAN-5 and China, the comparative advantages of both sides are different to some extent. If we look at the value added of the manufactured goods exported to the United States in 2000 (Figure 5.1), we can find that China’s value added was lower than that of ASEAN-5, which means the level of advancement of the export structure of China still lagged behind those of ASEAN-5 (Kwan 2002). China’s position in the value chain is lower than ASEAN-5 members in the manufacturing industry. As far as the categories of manufactured goods are concerned, there also exist some complementarities between China and ASEAN-5. From Appendix 4, we can see that China has comparative advantage in inorganic chemicals while Indonesia, Malaysia and Singapore have comparative advantage in organic chemicals such as alcohols, phenols and carboxylic acids etc.29 The values of the bilateral trade between China and ASEAN in 2003 also testify to the complementarity. China imported about US$2.02 billion organic chemicals from ASEAN-10 and exported only US$0.41 billion to ASEAN-10 in 2003, while China exported US$0.53 billion inorganic chemicals to ASEAN-10 and imported only US$0.05 billion from ASEAN-10. Even for machinery and electrical appliances, what China exports to ASEAN are mostly those for general or special use while what it imports from ASEAN

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FIGURE 5.1 Export Structuresa of Major Asian Economies in 2000 (Export of Manufactured Goods to the U.S. Market)

a Here, export structure is a method to measure the level of advancement of each country’s export structure based on the weighted average of the level of sophistication (value added) of the products composing it. Product sophistication index is obtained for each export item as the weighted average of the per capita GDP of its exporters, using their respective shares of global exports as weights. Please see Kwan (2002) for details. Source: Kwan (2002).

are mainly electronic components and devices (ASEAN Secretariat 2001). Actually, Singapore, Malaysia, Thailand and the Philippines have formed comparative advantage in industrial electronics while China has comparative advantage in household appliances and office machines. As the ASEAN–China Expert Group reported, kinescopes, transistors, integrated circuits and other electronic

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components and devices occupied a big proportion in China’s imports of machinery and electrical appliances from Malaysia, the Philippines, Singapore and Thailand (ASEAN Secretariat 2001). For example, in 2002, China was the largest importer of Philippine printed circuits (HS 8534) and second largest importer of Philippine electrical machine and appliances with individual function (HS 8543), accounting for 27 per cent and 17 per cent of the Philippine export market respectively. Meanwhile, China’s shares in the import of electric transformer and static converter (HS 8504) were 23 per cent, 16 per cent and 29 per cent for Singapore, Malaysia and Thailand respectively. For the imports of TV camera and transmission appliance for radio-telephony (HS 8525), China supplied 16 per cent, 14 per cent and 11 per cent for Singapore, Malaysia and Thailand respectively. As for parts and accessories of video and magnetic recorder, China provided about 17 per cent and 15 per cent of of the Philippines’ and Malaysia’s total imports.30 Presently, the technological content of the export products of Malaysia, the Philippines, Singapore and Thailand is higher than that of China, though the high-tech product export of China has increased very rapidly in recent years. The comparative advantage of Chinese high-tech products is still less than the four ASEAN members (Table 5.1). Though the comparative advantages of China and ASEAN-5 members in manufactured goods are becoming closer in recent years, the degree of trade interdependence has strengthened. This trend of development has much to do with the expansion of intra-industry trade of manufactured goods.

5.3 Complementarity in Other Respects China and ASEAN have certain complementarities in technology, though both sides belong to developing countries facing the task

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TABLE 5.1 RCA Indices of High Tech Products for China and ASEAN-4

1992 1993 1994 1995 1996 1997 1998

China

Philippines

Thailand

Malaysia

Singapore

0.36 0.38 0.43 0.52 0.61 0.61 0.69

1.52 1.61 1.63 1.75 2.85 2.47 –

1.22 1.10 1.22 1.22 1.42 1.44 –

2.15 2.18 2.28 2.30 2.17 2.29 2.48

2.47 2.46 2.61 2.70 2.72 2.66 2.66

Source: Mani, S. (2000).

of adjustment and upgrading of the industrial structure. Being a large developing country, China has an intact industry system. Particularly, with the swift development in advanced technologies in recent years, China has comparative advantage in certain fields, such as aviation and space, biotechnology, remote sensing techniques, information and communication technology, meteorology and earth sciences, etc. There is also complementarity in construction projects, labour service cooperation and tourism between ASEAN and China. ASEAN is China’s important market for construction projects and labour service. China has comparative advantage in the construction of infrastructure in contrast with ASEAN countries, such as the construction of roads, bridges, quays, airports, etc. Singapore is the second largest market for China in construction projects and labour services. According to Chinese statistics, in 2000, China obtained 3,651 newly signed contracts with US$2.73 billion in contract value and US$1.92 billion for finished turnover. Based on finished turnover, ASEAN was the second largest market for China in terms of contracted projects and labour services in

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2000.31 Meanwhile, more and more people travel between China and ASEAN. In 1998, Thailand and Singapore became the third and the seventh largest tourist destinations respectively for Chinese citizens, and the number of Malaysian tourists to China increased from 168,000 in 1993 to 300,000 in 1998. With the improvement of the living standards of the people of China, the number of Chinese travelling abroad is increasing constantly.

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VI PROSPECTS OF TRADE RELATIONS

From the analysis of the foregoing sections, we can see that China and ASEAN are not their respective major trading partners, although the bilateral trade between China and ASEAN has grown tremendously and that both competition and complementarity co-exist between China and ASEAN members. There is competition in market expansion in the third country for some categories between China and ASEAN members, but there is no question about complementarity between the economies of both sides. Considering China’s present trend of economic development, its shortage of energy and some other natural resources will be more serious, while ASEAN countries that have abundant natural resources can become main raw materials suppliers to China. With the implementation of China’s “going out” strategy, Chinese enterprises will increase their investment in the relevant arenas of energy and raw materials in ASEAN countries, and this will create wider prospects for both sides’ complementarity and cooperation in natural resources. Meanwhile, with the development of industrialization process and the investment of multinational corporations, the division of labour among China and ASEAN countries would be promoted especially in the fields of chemical, machinery and electronics, and intra-industry trade in the region would further accelerate. In addition, the establishment of the China–ASEAN Free Trade Area, the reduction of tariffs and elimination of non-tariff trade barriers on both

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sides, not only will stimulate bilateral trade but also motivate the adjustment of the economic structures to gain global competitiveness. Conversely, the deepening of regional division of labour between China and ASEAN is a stimulus to the economic cooperation between China and ASEAN, which will promote better allocation of resources. According to the statistics of the ASEAN–China Expert Group on Economic Cooperation, the establishment of the China–ASEAN Free Trade Area will create an economic region with 1.7 billion consumers, a regional GDP of about US$2 trillion and total trade estimated at US$1.23 trillion. The Free Trade Area would make Chinese exports to ASEAN increase by 55.1 per cent, and ASEAN exports to China increase by 48 per cent (ASEAN Secretariat 2001). Actually, the bilateral trade between China and ASEAN has increased greatly since 2002. According to the statistics of the Chinese customs, China’s total import and export value with ASEAN rose to US$54.77 billion and US$78.25 billion in 2002 and 2003 and increased by 31.6 per cent and 42.9 per cent compared with that of previous years respectively. The prospects for the China–ASEAN Free Trade Area are encouraging. However, because of the similarity of economic structure and competition between China and ASEAN members, there are some difficulties and challenges faced by both sides. The most important thing for both sides is to seek ways and forms of cooperation, to encourage regional division of labour that is in line with their respective comparative advantages.

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APPENDIX 1 Commodity Structure of the Bilateral Trade between China and ASEAN-5 in 2003 (%) Indonesia

SITC

Malaysia

Philippines

1985 1990 1995 1999 2003 1985 1990 1995 1999 2003 1985 1990 1995 1999 2003 0 to 4 Import 20.2 30.1 55.4 47.9 48.3 92.0 72.2 55.7 31.9 20.8 45.7 34.1 72.0 13.5 3.6 plus 9 Export 88.8 49.5 28.0 26.6 27.1 49.7 36.5 18.4 22.9 12.0 90.0 51.7 37.1 16.4 19.5 Total 39.0 36.3 44.1 40.0 39.0 71.5 61.9 41.4 29.1 18.1 79.4 46.6 44.5 15.3 8.8 5 to 8 Import 79.8 69.9 44.6 52.1 51.7 8.0 27.8 44.3 68.1 79.2 54.3 65.9 28.0 86.5 96.4 Export 11.2 50.5 72.0 73.4 72.9 50.3 63.5 81.6 77.1 88.0 10.0 48.3 62.9 83.6 80.5 Total 61.0 63.7 55.9 60.0 61.0 28.5 38.1 58.6 70.9 81.9 20.6 53.4 55.5 84.7 91.2 5

Import 4.9 7.7 8.7 11.3 14.5 1.1 2.4 6.0 Export 4.3 10.0 14.3 16.3 10.1 11.4 13.2 10.5 Total 4.7 8.5 11.0 13.1 12.6 6.1 5.5 7.7

6

Import 74.9 47.6 33,8 32.7 18.7 5.9 15.6 22.7 16.8 5.3 41.3 32.9 14.9 16.6 3.9 Export 3.4 9.2 26.5 19.2 19.7 26.3 30.1 33.7 17.6 11.8 2.1 23.9 29.5 19.3 18.7 Total 55.3 35.2 30.8 27.7 19.2 15.7 19.8 26.9 17.0 7.3 11.5 26.5 26.5 18.2 8.8

7

Import 0.0 14.4 1.5 7.5 17.6 Export 2.6 30.3 26.9 31.0 35.9 Total 0.7 19.5 11.9 16.2 25.6

1.1 9.0 15.1 40.9 63.5 4.0 13.5 26.7 37.9 58.6 2.5 10.3 19.5 39.9 62.0

1.1 2.4 8.0 65.9 89.3 5.8 16.3 18.4 47.4 41.7 4.7 12.2 16.2 54.7 73.6

8

Import 0.0 Export 0.9 Total 0.2

0.0 8.6 4.1

0.0 0.7 0.5

0.1 1.1 0.4

8.0 4.4 2.1

0.6 6.9 2.9

0.9 7.2 3.6

9.2 9.2 9.2

8.6 12.0 30.6 5.2 1.4 4.8 7.6 3.9 12.2

0.8 0.5 1.2 1.8 6.7 10.7 12.4 12.2 2.5 4.4 4.8 5.0

0.0 3.3 2.4

3.3 8.6 7.4

3.1 5.7 4.6

0.7 7.7 3.0

1.8 0.9 2.6 6.4 11.2 12.4 5.4 7.1 5.8

Notes: The trade data are based on China as a reporter. Primary goods and goods not classified by kind: SITC 0 to 4 plus 9. Manufactured goods: SITC 5 to 8 Chemical products: SITC 5 Manufactured goods by material: 6 Machinery, transport equipment: 7 Miscellaneous manufactured articles: 8 Unavailable data, Indonesia’s import value from China in 1999 is actually for 1998. Source: Figures for 2003 are calculated according to the data downloaded from , others are calculated according to the data at Hayase Yasuko, Statistics for Trade and Foreign Direct Investment in the APEC Member Economies 1980–2000, Japan: IDE-JETRO, 2002.

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Appendix 1

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APPENDIX 1 – cont’d

Singapore

SITC

Thailand

ASEAN-5

1985 1990 1995 1999 2003 1985 1990 1995 1999 2003 1985 1990 1995 1999 2003 0 to 4 Import 28.3 66.2 40.9 22.5 15.9 73.5 76.3 64.9 23.8 24.2 49.2 58.4 52.4 29.9 21.4 plus 9 Export 89.3 55.7 21.9 13.3 11.3 58.7 26.4 11.9 11.6 8.8 85.5 46.8 22.1 17.2 14.7 Total 82.9 58.8 31.2 17.6 13.8 68.9 42.4 37.3 19.7 19.6 75.0 51.9 37.6 24.5 19.0 5 to 8 Import 71.7 33.8 59.1 77.5 84.1 26.5 23.7 35.1 76.2 75.8 50.8 41.6 47.6 70.1 78.6 Export 10.7 44.3 78.1 86.7 88.7 41.3 73.6 88.1 88.4 91.2 14.5 53.2 77.9 82.8 85.3 Total 17.1 41.2 68.8 82.4 86.2 31.1 57.6 62.7 80.3 80.4 25.0 48.1 62.4 75.5 81.0 5

Import 34.1 14.2 10.5 16.0 20.7 2.9 Export 1.2 4.8 4.5 3.2 3.1 17.4 Total 4.6 7.6 7.5 9.3 12.6 7.3

6

Import 9.7 4.4 5.4 3.8 Export 6.9 22.3 24.4 14.5 Total 7.2 16.9 15.1 9.4

7

Import 23.9 12.9 40.9 52.4 53.2 Export 0.8 11.6 34.1 53.0 58.9 Total 3.2 12.0 37.4 52.7 55.8

0.4 8.1 9.0 36.5 47.5 9.2 19.0 27.3 42.2 52.1 3.1 15.5 18.6 38.4 48.9

5.5 11.3 20.2 37.8 55.8 2.0 15.5 28.8 44.9 51.9 3.0 13.7 24.4 40.8 54.4

8

Import 4.0 Export 1.8 Total 2.0

2.0 2.8 2.3

1.3 2.1 1.9

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8.2 7.2 7.6

9.0 13.8 12.3 9.1 8.4 6.6 9.1 11.5 10.2

4.2 21.2 8.3 13.6 15.0 11.1 33.4 20.7 17.1 16.1 7.7 9.8 11.9 41.7 41.6 22.0 19.8 7.7 25.9 30.0 17.4 14.4 6.8 18.4 31.0 28.2 17.4 13.7 15.1 23.6 23.4 16.7 10.2

2.4 2.3 5.4 6.0 5.6 15.2 16.0 16.9 4.7 8.8 11.0 11.0

45

4.0 11.2 22.9 15.1 10.6 9.8 13.2 16.4 11.6 2.7 8.0 12.3 20.7 14.0 5.0

3.2 3.0 3.1

1.3 5.9 3.7

1.8 7.7 3.8

2.1 7.8 3.9

1.4 1.3 2.4 2.8 4.6 10.0 12.2 12.4 3.1 5.6 6.6 6.3

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APPENDIX 2 Composition of the Bilateral Trade between China and ASEAN-10 at SITC 1-Digit and 2-Digit Levels (2003) Unit Value US$10,000 China’s export

SITC Description

Value

2 21 22 23 24 25 26

Crude materials, inedible, except fuels hides, skins and furskins, raw oil seeds and oleaginous fruits crude rubber (including synthetic and reclaimed) cork and wood pulp and waste paper textile fibers (other than wool tops and other combed wool) and their wastes

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Total trade

Value

Share (%)

Value

Share (%)

100 6.09

4,732,688 82,415

100 1.74

7,825,235 270,600

100 3.46

0.00 0.27 0.03

1,058 386 58

0.02 0.01 0.00

1,080 8,615 946

0.01 0.11 0.01

0.57 2.23 2.09

9,363 10,182 45,370

0.20 0.22 0.96

26,842 79,221 109,908

0.34 1.01 1.40

0.17

3,796

0.08

9,081

0.12

0.21

5,314

0.11

11,961

0.15

0.25

1,445

0.03

9,285

0.12

0.27

5,440

0.11

13,656

0.17

16,789 3,595

0.54 0.12

221 159

0.00 0.00

17,010 3,754

0.22 0.05

13,193

0.43

63

0.00

13,256

0.17

38,317 95 6,435

1.24 0.00 0.21

324,979 19 906

6.87 0.00 0.02

363,296 114 7,341

4.64 0.00 0.09

2,024 833 538

0.07 0.03 0.02

120,095 101,287 56,153

2.54 2.14 1.19

122,119 102,120 56,691

1.56 1.31 0.72

11,043

0.36

14,554

0.31

25,597

0.33

0~9 Total 3,092,547 0 Food and live animals 188,185 00 live animals other than fish, crustaceans, mollusks and aquatic invertebrates of division 03 22 01 meat and meat preparations 8,229 02 dairy products and birds’ eggs 888 03 fish, crustaceans, mollusks and aquatic invertebrates, and preparations thereof 17,479 04 cereals and cereal preparations 69,039 05 vegetables and fruit 64,538 06 sugars, sugar preparations and honey 5,285 07 coffee, tea, cocoa, spices and manufactures thereof 6,647 08 feeding stuff for animals (not including unmilled cereals) 7,840 09 miscellaneous edible products and preparations 8,216

1 Beverages and tobacco 11 beverages 12 tobacco and tobacco manufactures

China’s import

Share (%)

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Appendix 2

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APPENDIX 2 – cont’d

China’s export

SITC Description

Value 27 crude fertilizers (imports only), except those division 56 and crude minerals 28 metalliferous ores and metal scrap 29 crude animal and vegetable materials, n.e.s.

3 32 33 34 35

Mineral fuels, lubricants and related materials coal, coke and briquettes petroleum, petroleum products and related materials gas, natural and manufactured electric current

Animal and vegetable oils, fats and waxes 41 animal oils and fats 42 fixed vegetable fats and oils, crude, refined or fractionated 43 animal or vegetable fats and oils processed; waxes and inedible mixtures or preparations of fats

Share (%)

China’s import Value

Total trade

Share (%)

Value

Share (%)

9,629

0.31

4,280

0.09

13,909

0.18

362

0.01

20,853

0.44

21,215

0.27

7,358

0.24

6,833

0.14

14,191

0.18

256,347 10,362

8.29 0.34

561,828 8,258

11.87 0.17

818,175 18,620

10.46 0.24

245,846 94 44

7.95 0.00 0.00

512,423 41,147 0

10.83 0.87 0.00

758,269 41,241 44

9.69 0.53 0.00

1,384 173

0.04 0.01

167,720 15

3.54 0.00

169,104 188

2.16 0.00

1,177

0.04

158,437

3.35

159,614

2.04

34

0.00

9,268

0.20

9,302

0.12

233,393 41,194 52,638

7.55 1.33 1.70

562,844 201,833 5,479

11.89 4.26 0.12

796,237 243,027 58,117

10.18 3.11 0.74

18,558

0.60

17,081

0.36

35,639

0.46

18,443

0.60

1,055

0.02

19,498

0.25

7,586

0.25

9,914

0.21

17,500

0.22

4

5 51 52 53 54 55

Chemical and related products, n.e.s. organic chemicals inorganic chemicals dyeing, tanning and coloring materials medicinal and pharmaceutical products essential oils and resinoids and perfume materials; toilet and cleansing preparations

continued on next page

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APPENDIX 2 – cont’d China’s export

SITC Description

Value 56 fertilizers (exports include group 272; imports exclude group 272) 57 plastics in primary forms 58 plastics in nonprimary forms 59 chemical materials and products, n.e.s.

6 61 62 63 64

65

66 67 68 69

7 71 72 73 74

75

Manufactured goods classified chiefly by material leather, leather manufactures, n.e.s., and dressed furskins rubber manufactures, n.e.s. cork and wood manufactures other than furniture paper, paperboard, and articles of paper pulp, paper or paper board textile yarn, fabrics, made-up articles, n.e.s., and related products nonmetallic mineral manufactures, n.e.s. iron and steel nonferrous metals manufactures of metals, n.e.s.

48

Value

Total trade

Share (%)

Value

Share (%)

40,187 10,693 7,853

1.30 0.35 0.25

253 269,888 12,510

0.01 5.70 0.26

40,440 280,581 20,363

0.52 3.59 0.26

36,240

1.17

44,831

0.95

81,071

1.04

505,182

16.34

359,789

7.60

864,971

11.05

7,543 16,185

0.24 0.52

15,071 29,173

0.32 0.62

22,614 45,358

0.29 0.58

6,843

0.22

53,291

1.13

60,134

0.77

16,673

0.54

49,714

1.05

66,387

0.85

213,775

6.91

51,020

1.08

264,795

3.38

50,607 70,263 46,216 77,080

1.64 2.27 1.49 2.49

27,925 60,340 56,104 17,152

0.59 1.27 1.19 0.36

78,532 130,603 102,320 94,232

1.00 1.67 1.31 1.20

48.13

2,536,554

53.60

4,025,119

51.44

2.23

32,308

0.68

101,289

1.29

1.88 0.57

29,815 15,236

0.63 0.32

87,804 32,959

1.12 0.42

3.80

91,796

1.94

209,397

2.68

13.27

694,096

14.67

1,104,540

14.12

Machinery and transport equipment 1,488,565 power generating machinery and equipment 68,981 machinery specialized for particular industries 57,989 metal working machinery 17,723 general industrial machinery and equipment, n.e.s., and machine parts, n.e.s. 117,601 office machines and automatic data processing machines 410,444

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Share (%)

China’s import

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Appendix 2

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APPENDIX 2 – cont’d China’s export

SITC Description 76 telecommunications and sound recording and reproducing apparatus and equipment 77 electrical machinery, apparatus and appliances, n.e.s., and electrical parts thereof 78 road vehicles (including air-cushion vehicles) 79 transport equipment, n.e.s.

8 81

82

83 84 85 87

88

89

9

Share (%)

283,182

9.16

118,771

2.51

401,953

5.14

400,480

12.95

1,539,104

32.52

1,939,584

24.79

88,258 43,911

2.85 1.42

8,648 6,775

0.18 0.14

96,906 50,686

1.24 0.65

11.62

132,400

2.80

491,692

6.28

0.41

1,259

0.03

14,053

0.18

0.42

1,530

0.03

14,386

0.18

0.33

199

0.00

10,337

0.13

4.90 0.96

3,533 3,267

0.07 0.07

155,187 33,036

1.98 0.42

1.22

50,348

1.06

88,160

1.13

0.67

23,181

0.49

43,825

0.56

2.70

49,087

1.04

132,713

1.70

0.16

3,941

0.08

9,035

0.12

5,094

Value

Total trade

Value

Miscellaneous manufactured articles 359,292 prefabricated buildings; sanitary, plumbing, heating and lighting fixtures and fitting 12,794 furniture and parts thereof; bedding, mattresses, cushions and similar stuffed furnishings 12,856 travel goods, handbags and similar containers 10,138 articles or apparel and clothing accessories 151,654 footwear 29,769 professional, scientific and controlling instruments and apparatus, n.e.s. 37,812 photographic apparatus, equipment and supplies and optical goods, n.e.s.; watches and clocks 20,644 miscellaneous manufactured articles, n.e.s. 83,626 Commodities and transactions not classified elsewhere in the SITC

China’s import Share (%)

Value

Note: The trade data are based on China as a reporter. Source: Calculated according to the trade data downloaded from .

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Share (%)

50

China-ASEAN Trade Relations

APPENDIX 3 Intra-Industry Trade Indices and Contribution of the Bilateral Trade between China and ASEAN-5 at HS 2-Digit Level GLi

HS 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

Live Animals Meat & Edible Meat Offal Fish Dairy Produce Other Animal Products Live Trees Edible Vegetables Edible Fruit & Nuts Coffee, Tea, Spices Cereals Malt & Wheat Gluten Seeds Lac, Gums & Resins Other Vegetable Products Fats & Oils Preparations Meat/Fish Sugars Cocoa Prep. Cereals/Flour/Milk Prep. Vegetables/Fruit/Nuts Misc. Edible Products Beverages Waste from Food Industry Tobacco Salt/Sulphur/Lime/Cement Ores Lubricants/Fuels/Oil Inorganic Chemicals Organic Chemicals Pharmaceutical Products Fertilizers Tanning/Dyeing Extracts/Ink Cosmetics

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1996

2002

tti

Cnti

Ciiti

0.54 0.05 0.43 0.85 0.20 0.13 0.04 0.59 0.18 0.03 0.82 0.06 0.27 0.03 0.04 0.02 0.19 0.11 0.47 0.13 0.42 0.39 0.77 0.68 0.02 0.64 0.43 0.07 0.66 0.51 0.23 0.93 0.28

0.15 0.44 0.91 0.26 0.20 0.78 0.64 0.55 0.42 0.37 0.35 0.21 0.37 0.83 0.02 0.28 0.81 0.23 0.51 0.31 0.88 0.50 0.14 0.29 0.25 024 0.38 0.15 0.40 0.88 0.16 0.77 0.91

–0.11 0.65 0.72 9.43 2.08 2.61 0.43 0.86 0.30 0.93 5.28 –0.16 1.11 4.50 0.98 1.39 2.36 –0.14 0.66 0.50 1.12 4.96 3.70 –0.71 –0.55 0.81 1.63 1.18 3.90 1.44 –0.16 2.87 4.62

0.29 –0.03 –0.41 7.56 1.67 –0.06 –0.45 0.42 –0.07 0.24 3.92 –0.28 0.59 –0.01 0.98 0.75 –0.18 –0.23 0.28 0.16 –0.32 2.39 3.79 –0.12 –0.64 1.02 1.06 0.93 2.60 –0.20 –0.06 0.81 –0.23

–0.40 0.68 1.13 1.87 0.41 2.67 0.88 0.44 0.37 0.69 1.36 0.12 0.52 4.51 0.00 0.64 2.54 0.09 0.38 0.34 1.44 2.57 –0.09 –0.60 0.09 –0.21 0.57 0.25 1.29 1.64 –0.10 2.06 4.85

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APPENDIX 3 – cont’d

GLi

HS 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62

Soap, Waxes, Pastes Albuminoidal Substance, Glues Explosives Photographic Goods Misc. Chemical Products Plastics and Articles Thereof Rubbers and Articles Thereof Raw Hides & Skins Articles of Leather Furskins and Artificial Fur Wood and Articles of Wood Cork and Articles of Cork Manufactures of Straw Pulp of Wood Paper and Paperboard Printed Books, Newspapers, Printings Silk Wool Cotton Other Vegetable Textile Fibres Man-Made Filaments Man-Made Staple Fibers Wadding, Felt and Nonwovens Carpets and Other Textile Floor Coverings Special Woven Fabrics Laminated Textile Fabrics Knitted or Crocheted Fabrics Apparel, Knitted Apparel, not Knitted

1996

2002

tti

Cnti

Ciiti

0.99 0.68 0.08 0.85 0.82 0.60 0.42 0.97 0.10 0.00 0.14 0.33 0.05 0.02 0.78

0.66 0.35 0.11 0.89 0.79 0.41 0.34 0.67 0.07 0.20 0.16 0.17 0.22 0.02 0.57

2.12 3.64 0.83 27.55 3.40 5.72 0.89 3.87 2.27 2.09 0.11 3.84 –0.26 4.29 1.29

1.05 2.70 0.70 3.03 0.74 3.56 0.66 1.57 2.14 1.47 0.07 3.36 –0.38 4.22 0.77

1.07 0.94 0.13 24.52 2.66 2.15 0.22 2.30 0.13 – 0.04 0.48 0.11 0.08 0.52

0.24 0.01 0.82 0.30 0.08 0.88 0.82 0.19

0.98 0.06 0.39 0.38 0.25 0.75 0.68 0.45

1.44 –0.80 1.74 1.57 1.33 3.58 0.39 0.68

–0.71 –0.80 1.50 0.89 0.81 1.01 0.27 0.11

2.15 0.00 0.24 0.68 0.51 2.57 0.12 0.57

0.57 0.30 0.56 0.27 0.05 0.10

0.55 0.12 0.59 0.07 0.07 0.06

0.20 1.50 2.72 2.80 6.24 3.99

0.11 1.49 1.11 2.82 5.80 3.81

0.09 0.01 1.62 –0.02 0.44 0.18

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APPENDIX 3 – cont’d GLi

HS 63 64 65 66 67 68 69 70 71 72 73 74 75 76 78 79 80 81 82 83 84 85 86 87 88 89 90

Other Textile Articles Footwear, Gaiters and the Like Headgear and Parts Thereof Umbrellas, Walking Sticks Prepared Feathers Stone/Plaster/Cement Ceramic Products Glass and Glassware Jewelry Iron and Steel Articles of Iron or Steel Copper and Articles Thereof Nickel and Articles Thereof Aluminum and articles Thereof Lead and Articles Thereof Zinc and Articles Thereof Tin and Articles Thereof Other Base Metals, Cermets Tools, Implements, Cutlery Miscellaneous Articles of Base Metal Machinery and Mechanical Appliances Electrical Machinery and Equipment Railway or Tramway Vehicles Other Than Railway/ Tramway Aircraft, Spacecraft, and Parts Thereof Ships, Boats and Floating Structures Optical/Medical Instruments

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1996

2002

tti

Cnti

Ciiti

0.03 0.04 0.01 0.03 0.02 0.27 0.07 0.57 0.17 0.20 0.31 0.29 0.50 0.50 0.02 0.04 0.88 0.35 0.30

0.07 0.20 0.12 0.06 0.08 0.48 0.10 0.90 0.83 0.90 0.39 0.38 0.38 0.64 0.08 0.08 0.71 0.74 0.61

–0.13 1.54 0.21 0.49 –0.05 0.36 1.58 2.10 5.24 –0.06 0.74 0.11 4.59 1.13 0.22 0.76 2.85 2.26 1.01

–0.17 1.07 0.08 0.43 –0.11 –0.03 1.40 –0.12 0.24 –0.71 0.37 –0.03 2.95 0.26 0.15 0.66 1.00 0.21 0.09

0.04 0.46 0.13 0.06 0.06 0.39 0.18 2.22 5.00 0.65 0.37 0.14 1.64 0.87 0.07 0.10 1.85 2.04 0.92

0.25

0.34

0.99

0.57

0.42

0.84 0.51 0.06

0.91 0.90 0.12

4.28 5.29 0.89

0.31 0.14 0.73

3.97 5.16 0.16

0.85

0.92

1.47

0.04

1.42

0.54

0.48

3.32

1.79

1.52

0.02 0.73

0.72 0.85

–0.41 4.27

–0.82 0.50

0.40 3.77

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APPENDIX 3 – cont’d GLi

HS 91 Clocks and Watches and Parts Thereof 92 Musical Instruments 93 Arms & Ammunition 94 Furniture, Bedding, Mattresses 95 Toys, Games and Sports Requisites

1996

2002

tti

Cnti

Ciiti

0.16 0.11 0.00 0.62 0.04

0.95 0.16 0.01 0.34 0.14

2.51 2.23 –0.18 1.76 1.42

–0.65 1.82 –0.19 1.45 1.11

3.16 0.41 – 0.31 0.31

Note: The trade data are based on ASEAN countries as reporters. “–” means unavailable. Source: Calculated according to the trade data downloaded from ASEAN Secretariat Database.

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55

APPENDIX 4 Revealed Comparative Advantage Index (RCA) of China and ASEAN-5 Countries (2001) China

SITC Commodity 001 011 012 014 022 023 024 025 034 035 036 037 041 042 043 044 045 046 047 048 054 056 057 058 061 062 071 072 073 074 075 081 091 098

Live animals for food Meat, fresh, chilled, frozen Meat dried, salted, smoked Meat prepd, prsrvd n.e.s., etc. Milk and cream Butter Cheese and curd Eggs, yolks, fresh, prsrvd Fish, fresh, chilled, frozen Fish salted, dried, smoked Shell fish fresh, frozen Fish etc. prepd, prsrvd n.e.s. Wheat etc., unmilled Rice Barley, unmilled Maize (corn), unmilled Cereals n.e.s., unmilled Wheat etc., meal or flour Other cereal meals, flour Cereal etc. preparations Vegtb etc. fresh, simply prsrvd Vegtb etc. prsrvd, preprd Fruit, nuts, fresh, dried Fruit prsrvd, preprd Sugar and honey Sugar preps non-chocolate Coffee and substitutes Cocoa Chocolate and products Tea and mate Spices Feeding stuff for animals Margarine and shortening Edible products, preps n.e.s.

export

import

0.86 0.49 0.03 2.17 0.06 0.00 0.00 0.60 1.59 0.86 1.15 3.32 0.07 0.95 0.00 1.55 0.50 0.74 0.26 0.47 1.45 3.41 0.29 1.53 0.30 0.46 0.05 0.09 0.03 2.58 1.75 0.34 0.10 0.56

0.06 0.41 0.00 0.03 0.38 0.02 0.01 0.01 0.90 0.25 0.52 0.02 0.19 0.41 3.45 0.01 0.01 0.24 0.49 0.13 0.24 0.10 0.29 0.06 0.61 0.17 0.02 0.20 0.14 0.03 0.10 0.70 1.23 0.28

Indonesia export import 0.46 0.07 0.02 0.00 0.70 0.00 0.00 1.78 1.56 2.20 6.65 1.17 0.00 0.01 0.00 0.12 0.02 0.03 0.69 0.43 0.20 0.56 0.40 0.86 0.08 1.40 2.26 9.09 0.38 3.61 7.68 0.41 5.76 0.39

1.74 0.22 0.03 0.06 4.25 0.86 0.28 0.23 0.08 0.13 0.19 0.03 5.05 4.37 0.18 2.49 0.29 5.31 1.64 0.30 0.71 0.37 0.90 0.14 3.68 0.52 0.15 1.35 0.39 0.25 2.21 5.00 0.26 0.76

Malaysia export import 0.79 0.01 0.01 0.14 0.27 0.06 0.00 1.84 0.15 0.07 0.87 0.55 0.00 0.00 0.00 0.02 0.02 1.01 0.35 0.69 0.16 0.23 0.24 0.18 0.44 0.31 0.45 2.37 0.24 0.04 1.60 0.32 5.03 0.46

0.54 0.47 0.02 0.11 2.04 0.53 0.12 0.12 0.66 0.43 0.37 0.19 1.10 1.93 0.01 1.83 0.08 0.19 2.42 1.11 0.84 0.43 0.32 0.29 1.77 0.38 0.31 1.74 0.26 0.34 1.79 0.96 0.22 0.76

Philippines export import 0.01 0.00 0.00 0.03 0.40 0.00 0.01 0.18 0.71 0.33 2.20 1.65 0.00 0.00 0.00 0.01 0.00 0.15 0.01 0.57 0.17 0.08 2.90 3.19 0.48 1.18 0.08 0.35 0.05 0.01 0.02 0.35 0.04 0.53

0.82 0.61 0.13 0.43 5.64 0.84 0.70 0.42 0.26 0.03 0.09 0.03 6.05 4.90 0.02 0.57 0.22 0.71 0.48 1.41 0.51 0.62 0.21 0.31 1.04 0.86 0.38 0.81 0.92 0.12 0.32 2.86 0.70 1.99

Singapore export import 0.02 0.01 0.00 0.02 0.29 0.11 0.01 0.01 0.52 0.39 0.25 0.14 0.01 0.01 0.00 0.00 0.01 0.25 0.42 0.34 0.07 0.08 0.11 0.20 0.13 0.16 0.51 0.90 0.52 0.25 3.54 0.10 0.91 0.56

0.64 0.37 0.14 0.52 0.82 0.62 0.11 1.61 0.42 0.56 0.40 0.58 0.09 1.02 0.00 0.02 0.01 0.67 0.56 0.49 0.39 0.42 0.44 0.38 0.44 0.39 0.28 0.48 0.41 0.32 3.58 0.08 0.28 0.65

Thailand export import 0.06 1.40 0.00 5.60 0.59 0.00 0.00 0.42 1.54 1.23 8.92 19.13 0.00 18.62 0.00 0.56 0.47 0.17 8.45 0.84 1.39 2.29 0.60 3.85 5.64 0.83 0.31 0.29 0.03 0.06 0.57 1.12 0.01 1.84

0.25 0.01 0.01 0.02 1.88 0.71 0.07 0.12 2.58 0.07 1.44 0.21 0.85 0.00 0.06 0.04 0.11 0.71 0.38 0.88 0.12 0.24 0.20 0.23 0.09 0.34 0.14 0.41 0.17 0.05 0.40 2.43 0.05 0.63

continued on next page

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Appendix 4

57

APPENDIX 4 – cont’d China

SITC Commodity 111 112 121 122 211 212 222 223 232 233 244 245 246 247 248 251 261 263 264 265 266 267 268 269 271 273 274 277 278 281 282 287 288 289 291

Non alcoholic beverages n.e.s. Alcoholic beverages Tobacco, unmanufactd, refuse Tobacco, manufactured Hides skins, excl. furs, raw Furskins, raw Seeds for soft fixed oils Seeds for other fixed oils Natural rubber, gums Rubber, synthetic, reclaimed Cork, natural, raw, waste Fuel wood n.e.s., charcoal Pulpwood, chips, woodwaste Other wood rough, squared Wood, shaped, rail sleepers Pulp and waste paper Silk Cotton Jute, other textile bast fibres Vegetb fibre, exc cotton, jute Synthetic fibres for spinning Other man-made fibres Wool (excl. tops), animal hair Waste of textile fabrics Fertilizers, crude Stone, sand and gravel Sulphur, unroastd iron pyrites Natural abrasives n.e.s. Other crude minerals Iron ore and concentrates Iron and steel scrap Base metals ores, conc n.e.s. Non-ferrous metal scrap n.e.s. Prec metal ores, waste n.e.s. Crude animal materials n.e.s.

export

import

1.35 0.10 0.70 0.30 0.03 0.08 0.62 1.30 0.00 0.24 0.29 3.80 1.34 0.02 0.27 0.01 17.92 0.24 0.25 0.31 0.28 0.04 2.00 0.12 2.73 0.77 0.11 0.53 2.71 0.00 0.01 0.10 0.09 0.03 4.33

0.02 0.12 0.86 0.06 3.51 1.58 5.00 0.70 3.74 2.78 0.60 0.21 0.05 4.67 0.97 3.25 0.61 0.36 0.43 5.36 4.77 4.64 6.43 0.08 0.07 2.34 4.40 0.24 0.56 5.00 3.18 2.70 3.73 0.01 1.15

Indonesia export import

Malaysia export import

0.23 0.02 1.60 1.31 0.03 0.00 0.02 0.84 26.16 0.37 0.29 6.78 1.03 0.99 1.38 3.13 0.03 0.28 0.08 0.07 1.16 2.60 0.02 0.16 0.32 2.73 0.03 0.54 0.36 0.00 0.23 10.61 0.30 0.02 0.20

0.71 0.15 0.01 0.97 0.05 0.00 0.02 0.13 10.59 0.10 0.00 2.15 0.41 3.86 2.24 0.00 0.05 0.05 0.00 0.05 0.66 0.05 0.01 1.02 0.05 0.26 0.04 0.01 0.15 0.01 0.05 0.10 0.42 0.11 0.10

0.44 0.01 4.06 1.12 0.19 0.07 3.43 0.50 0.33 3.15 0.20 0.05 0.00 0.75 0.30 6.67 0.20 25.86 2.21 0.66 9.05 2.51 0.03 0.46 6.54 1.80 4.47 0.23 3.31 0.93 3.42 1.17 0.22 0.03 0.78

0.05 0.15 1.65 0.30 0.17 0.00 0.93 0.97 5.87 1.30 0.06 0.12 0.00 0.63 0.34 0.25 0.01 0.92 0.21 0.09 0.88 0.17 0.57 4.13 1.16 0.51 0.11 0.75 0.90 0.46 2.67 0.53 0.39 0.05 0.28

Philippines export import 0.08 0.09 0.57 0.22 0.05 0.00 0.00 0.69 0.77 0.00 0.00 2.98 0.05 0.00 0.12 0.29 0.00 0.01 0.00 3.70 0.00 0.04 0.00 0.54 0.21 0.54 0.03 0.01 0.16 1.24 0.51 0.40 1.33 1.87 0.14

0.23 0.26 1.99 1.29 0.07 0.00 1.18 0.11 0.07 0.76 0.03 0.02 0.11 0.96 0.66 0.75 0.10 1.39 0.14 0.28 2.00 2.06 0.02 1.08 5.42 0.57 4.66 0.43 0.90 1.59 0.10 2.71 0.04 0.00 0.14

Singapore export import 0.27 0.54 0.01 2.18 0.23 0.00 0.02 0.40 2.27 0.16 0.00 0.80 0.00 0.08 0.17 0.17 0.27 0.04 0.00 0.00 0.03 0.10 0.00 1.00 0.02 0.05 0.25 1.14 0.08 0.00 0.59 0.15 0.87 0.17 0.21

0.82 0.66 0.29 2.18 0.25 0.00 0.07 0.30 1.17 0.31 0.03 0.11 0.02 0.08 0.16 0.02 0.32 0.05 0.00 0.02 0.02 0.39 0.00 1.43 0.02 1.15 0.01 1.23 0.18 0.00 0.18 0.12 0.18 0.04 0.20

Thailand export import 1.17 0.09 0.86 0.07 0.03 0.00 0.05 0.21 38.00 0.79 0.00 0.25 2.04 0.00 0.47 0.61 0.86 0.03 0.75 0.29 3.78 2.02 0.03 0.10 0.01 1.55 0.03 15.34 0.48 0.00 0.32 0.09 0.52 0.22 0.81

0.04 0.33 0.61 0.49 3.37 0.00 1.81 0.48 0.14 2.00 0.09 0.37 0.01 1.06 0.93 1.40 2.58 5.96 10.07 0.07 1.19 0.74 1.34 0.21 1.22 0.20 0.60 1.37 1.08 0.00 1.29 1.01 0.24 0.00 1.22

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Appendix 4

59

APPENDIX 4 – cont’d China

SITC Commodity 292 322 323 333 334 335 341 351 411 423 424 431 511 512 513 514 515 516 522 523 524 531 532 533 541 551 553 554 562 572 582 583 584 585 591

Crude vegetb materials n.e.s. Coal, lignite and peat Briquettes, coke and semi-coke Crude petroleum Petroleum products, refined Residual petroleum prdts n.e.s. Gas, natural and manufactured Electric current Animal oils and fats Fixed vegetable oils, soft Other fixed vegetable oils Procesd animl and veg oil, etc. Hydrocarbons n.e.s., derivtives Alcohols, phenols, etc. Carboxylic acids, etc. Nitrogen-function compounds Organo-inorgan compounds, etc. Other organic chemicals Inorg chem elmnts, oxides, etc. Other inorganic chemicals Radioactive etc. materials Synth dye, natrl indigo, lakes Dyes n.e.s., tanning products Pigments, paints, varnishes etc. Medicinal, pharmaceutical prdts Essential oils, perfume, etc. Perfumery, cosmetics, etc. Soap, cleansing, etc. preps Fertilizers, manufactured Explosives, pyrotechnic prdts Prdts of condensation, etc. Polymerization, etc., prdts Cellulose, derivatives, etc. Plastic materials n.e.s. Pesticides, disinfectants

export

import

0.71 2.82 8.66 0.10 0.33 0.87 0.06 1.31 0.09 0.19 0.10 0.07 0.31 0.48 0.91 0.63 0.53 0.74 1.72 2.29 1.00 2.10 0.65 0.38 0.33 0.23 0.28 0.20 0.58 5.43 0.27 0.14 0.22 2.15 1.14

0.32 0.09 0.00 0.88 0.70 1.25 0.38 0.20 1.58 0.16 1.95 0.63 2.31 2.94 3.10 0.66 0.55 1.00 0.70 0.67 0.47 1.04 1.91 1.44 0.23 0.32 0.08 0.49 2.27 0.03 1.96 3.36 0.86 0.27 0.39

Indonesia export import

Malaysia export import

Philippines export import

0.66 8.08 0.33 1.87 0.86 0.37 7.22 0.00 0.02 0.06 22.24 3.59 0.73 1.91 1.85 1.06 0.08 0.07 1.16 0.09 0.01 0.87 0.90 0.10 0.07 0.89 0.25 1.44 0.91 0.04 1.26 0.47 0.07 0.05 0.56

0.14 0.00 0.05 0.63 0.95 0.24 2.83 0.00 0.03 0.75 26.57 14.83 0.76 2.08 1.86 0.04 0.04 0.55 0.22 0.24 0.01 0.06 0.03 0.54 0.04 0.04 0.17 0.85 0.65 0.19 0.85 0.60 0.13 0.14 0.32

1.04 0.00 0.01 0.00 0.32 0.00 0.06 0.00 0.02 0.01 12.13 0.85 0.01 0.50 0.01 0.00 0.00 0.02 0.39 0.09 0.00 0.05 0.07 0.10 0.04 0.06 0.12 0.32 0.44 0.51 0.06 0.15 0.01 0.00 0.07

0.35 0.02 0.60 1.71 3.74 1.68 0.02 0.00 0.87 0.19 0.21 1.26 9.04 4.24 2.27 0.97 1.63 1.60 2.02 3.42 0.06 4.31 1.65 1.81 0.28 3.41 0.33 1.29 2.24 3.44 1.85 1.48 2.82 2.83 0.96

0.32 0.47 0.25 0.39 1.12 1.60 0.12 0.00 0.11 0.67 1.40 0.66 1.66 1.41 1.03 0.31 0.38 0.56 0.73 1.36 0.25 0.65 0.34 0.77 0.26 0.79 0.71 0.64 1.31 0.39 1.56 0.84 0.79 0.19 0.42

0.29 1.09 0.44 1.65 0.56 0.35 0.44 0.00 1.79 0.21 0.44 0.89 1.45 0.65 0.79 0.43 0.20 0.50 1.27 1.56 0.03 0.81 0.51 1.02 0.54 2.02 0.68 1.11 2.39 0.56 1.02 0.96 0.83 1.58 1.74

Singapore export import 0.36 0.00 0.00 0.00 2.98 1.32 0.15 0.00 0.35 0.18 0.68 1.02 0.82 1.34 1.51 1.00 2.11 1.07 0.19 0.17 0.16 1.09 0.56 1.13 0.41 0.97 0.89 0.48 0.02 0.35 1.49 0.72 0.30 3.34 0.50

0.34 0.00 0.00 1.20 2.64 0.10 0.00 0.00 0.25 0.27 0.87 0.44 0.51 1.37 0.68 0.27 0.26 1.06 0.64 0.59 0.20 0.99 0.53 0.79 0.31 0.62 1.23 0.61 0.03 1.24 0.97 0.45 0.49 0.43 0.53

Thailand export import 0.60 0.00 0.00 0.09 0.70 1.91 0.21 0.00 0.04 0.17 0.95 0.79 1.38 0.26 0.76 0.32 0.11 0.06 0.34 0.24 0.00 0.46 0.36 0.22 0.08 0.60 0.98 0.39 0.11 0.06 1.46 1.56 0.13 0.09 0.46

0.39 0.64 0.26 1.71 0.58 1.03 0.71 0.00 0.38 0.11 0.18 1.33 1.21 2.55 1.40 0.66 0.50 1.23 1.10 1.81 0.07 1.59 0.98 2.22 0.40 1.58 0.45 1.29 2.78 0.44 1.44 0.99 1.14 0.77 1.78

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APPENDIX 4 – cont’d China

SITC Commodity 592 598 611 612 613 621 625 628 633 634 635 641 642 651 652 653 654 655 656 657 658 659 661 662 663 664 665 666 667 671 672 673 674 676 677

Starch, inulin, gluten, etc. Miscel chemical prdts n.e.s. Leather Leather, etc., manufactures Fur skins tanned, dressed Materials of rubber Rubber tyres,tubes, etc. Rubber articles n.e.s. Cork manufactures Veneers, plywood, etc. Wood manufactures n.e.s. Paper and paperboard Paper and paperboard, cut Textile yarn Cotton fabrics, woven Woven man-made fib fabric Other woven textile fabric Knitted, etc., fabric Lace, ribbon, tulle, etc. Spec textile fabrics, products Textile articles n.e.s. Floor coverings, etc. Lime, cement and building prdts Clay, refractory building prdts Mineral manufactures n.e.s. Glass Glassware Pottery Pearl, prec, semi-prec stones Pig iron, etc. Iron, steel primary forms Iron, steel shapes, etc. Iron, steel univ, plate, sheet Railway rails etc., iron, steel Iron, steel wire, exc w rod

export

import

0.41 0.40 1.27 2.26 3.59 0.27 0.99 0.63 0.10 0.57 2.01 0.16 0.77 2.04 3.52 2.75 2.56 2.36 1.21 0.84 4.74 1.75 2.20 0.82 0.50 0.70 1.20 6.02 0.28 2.13 0.59 0.32 0.18 0.34 0.71

1.16 1.30 3.72 1.35 2.42 1.00 0.05 0.68 0.24 0.87 0.05 1.13 0.37 2.51 2.31 3.39 2.87 2.71 2.38 2.12 0.04 0.12 0.23 0.26 0.49 1.42 0.55 0.01 0.37 0.58 3.05 0.57 3.04 0.70 1.69

Indonesia export import 0.16 0.27 0.57 0.52 0.01 0.26 1.18 0.56 0.16 16.33 5.14 2.49 1.15 4.34 2.21 3.93 0.03 0.42 1.37 0.76 1.43 0.48 1.77 0.82 0.76 1.05 1.20 1.62 0.05 0.62 0.08 0.37 0.22 0.12 0.50

2.94 1.67 1.94 2.19 0.07 1.23 0.61 1.49 0.11 0.31 0.10 0.57 0.65 1.62 1.67 1.78 0.79 1.92 1.98 2.35 0.10 0.12 0.14 1.01 0.74 0.34 0.48 0.20 0.01 1.19 2.63 1.08 1.56 0.64 1.59

Malaysia export import 0.25 0.76 0.06 0.16 0.02 1.57 0.19 0.61 0.01 5.62 1.06 0.31 0.52 1.00 0.37 0.71 0.02 0.66 0.10 0.16 0.09 0.09 0.44 0.53 0.52 0.78 0.72 0.59 0.02 0.37 0.04 0.26 0.20 0.05 0.38

0.72 1.02 0.37 0.19 0.10 0.49 0.16 0.71 0.03 0.36 0.15 0.90 0.47 0.60 0.55 0.65 0.23 1.32 0.35 0.46 0.12 0.22 0.40 0.48 0.77 0.89 0.94 0.23 0.07 1.25 0.50 0.87 1.42 2.44 0.85

Philippines export import 0.06 0.15 0.04 0.08 0.01 0.08 0.28 0.37 0.00 0.07 1.33 0.17 0.18 0.21 0.09 0.24 0.13 0.34 0.91 0.38 0.77 0.25 0.74 0.02 0.12 0.63 0.19 1.37 0.05 0.01 0.02 0.00 0.01 0.00 0.01

1.68 0.97 0.74 0.58 0.02 0.64 0.57 0.62 0.10 0.54 0.21 0.81 0.56 1.07 2.15 1.79 1.37 4.23 2.27 1.25 0.24 0.12 1.81 0.79 0.46 0.85 0.80 0.25 0.01 0.11 2.67 1.02 1.54 0.09 0.70

Singapore export import 0.28 1.05 0.31 0.07 0.00 0.31 0.22 0.66 0.01 0.20 0.10 0.18 0.30 0.31 0.16 0.31 0.10 0.56 0.21 0.15 0.12 0.07 0.05 0.03 0.16 0.41 0.19 0.10 0.19 0.02 0.04 0.20 0.17 0.09 0.11

0.47 1.14 0.24 0.22 0.01 0.35 0.41 0.76 0.04 0.25 0.27 0.34 0.49 0.15 0.28 0.43 0.34 0.96 0.46 0.40 0.29 0.37 0.72 0.57 0.59 0.74 0.58 0.28 0.39 0.09 0.23 0.73 0.57 0.28 0.59

Thailand export import 2.98 0.20 1.48 2.28 0.08 1.42 1.41 1.96 0.00 0.50 1.57 0.54 0.80 1.52 1.25 1.55 0.19 0.54 1.84 1.00 1.01 0.55 2.95 0.58 1.31 0.81 0.61 3.61 0.98 0.09 0.05 0.46 0.54 0.08 0.50

0.99 1.28 1.60 0.41 0.39 0.84 0.20 1.81 0.09 0.21 0.11 0.50 0.47 1.06 0.97 1.47 0.83 1.80 1.53 1.13 0.14 0.08 0.04 0.29 1.43 1.29 0.59 0.05 1.63 0.51 4.55 1.35 1.64 1.62 1.10

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Appendix 4

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APPENDIX 4 – cont’d China

SITC Commodity 678 679 681 682 683 684 685 686 687 689 691 692 693 694 695 696 697 699 711 712 713 714 716 718 721 722 723 724 725 726 727 728 736 737 741

Iron, steel tubes, pipes, etc. Iron, steel castings unworked Silver, platinum, etc. Copper Nickel Aluminium Lead Zinc Tin Non-fer base metals n.e.s. Structures and parts n.e.s. Metal tanks, boxes, etc. Wire products, non-electric Stell, copper nails, nuts, etc. Tools Cutlery Base metal household equip Base metal manufactures n.e.s. Steam boilers and auxil parts Steam engines, turbines Intern combust piston engines Engines and motors n.e.s. Rotating electric plant Oth power generating machinery Agricult machinery excl. tractor Tractors non-road Civil engineering equip, etc. Textile, leather machinery Paper etc. mill machinery Print and bookbind machy, parts Food machinery, non-domestic Other machy for spec industries Metal working machy, tools Metal working machinery n.e.s. Heating, cooling equipment

export

import

0.77 2.71 0.48 0.39 0.15 0.43 3.85 2.76 5.12 3.12 1.43 0.59 1.51 1.31 1.31 4.65 3.99 1.31 0.89 0.23 0.18 0.07 1.54 0.30 0.21 0.19 0.31 0.90 0.16 0.08 0.27 0.28 0.35 0.43 0.90

0.80 0.54 0.16 3.05 1.29 0.99 0.34 1.09 1.60 0.67 0.33 0.36 0.51 0.78 0.47 0.36 0.10 0.56 3.18 1.77 0.52 0.24 1.54 2.86 0.37 0.05 0.50 3.96 1.69 2.40 1.27 2.72 2.19 2.39 1.28

Indonesia export import 0.56 0.15 0.20 1.43 0.06 0.63 0.23 0.08 15.59 0.05 0.47 1.72 0.36 0.49 0.06 1.05 1.31 0.22 0.37 0.33 0.13 0.03 0.78 0.09 0.03 0.02 0.17 0.07 0.06 0.14 0.04 0.05 0.02 0.06 0.24

2.40 3.07 0.01 0.86 0.17 1.23 2.63 3.93 0.30 0.18 0.50 0.84 0.99 1.41 0.86 0.30 0.20 0.63 1.74 1.54 1.32 0.39 0.68 0.74 0.57 0.50 2.86 3.96 3.31 1.45 3.38 1.55 1.62 2.35 1.39

Malaysia export import 1.19 0.26 0.00 0.88 0.06 0.30 1.29 0.17 7.24 0.01 0.57 0.65 0.99 0.62 0.24 0.38 0.19 0.48 0.35 0.20 0.14 0.28 0.75 0.03 0.08 0.01 0.12 0.16 0.10 0.63 0.63 0.41 0.19 0.22 0.99

2.53 1.86 0.41 2.02 0.16 0.94 2.82 1.70 2.08 0.32 0.32 0.78 0.76 1.04 1.04 0.25 0.17 0.91 5.70 2.39 0.63 0.53 1.45 0.32 0.38 0.19 0.49 0.70 1.03 1.61 0.83 2.00 1.66 1.39 0.97

Philippines export import 0.08 0.22 0.02 1.79 0.00 0.01 0.03 0.02 0.18 3.58 0.16 0.17 0.18 0.16 0.12 0.12 0.35 0.24 0.15 0.00 0.16 0.00 0.08 0.00 0.00 0.04 0.13 0.06 0.14 0.11 0.16 0.31 0.14 0.01 0.26

0.44 0.15 0.01 1.16 0.07 0.61 0.86 1.72 0.69 0.10 2.10 0.72 0.46 0.46 0.26 0.33 0.26 0.46 0.34 0.65 0.37 0.21 1.19 0.66 0.23 0.20 0.55 0.48 0.37 0.48 1.13 2.09 0.81 0.42 0.78

Singapore export import 0.48 0.21 0.69 0.40 0.68 0.25 1.61 0.87 7.43 0.25 0.19 0.27 0.27 0.52 0.72 0.25 0.18 0.36 0.11 0.13 0.23 0.11 1.35 0.12 0.06 0.03 1.60 0.68 0.10 0.56 0.22 0.77 0.50 0.35 0.42

1.07 0.88 0.30 0.79 1.33 0.72 2.01 2.19 2.96 0.36 0.85 0.49 0.97 0.59 1.02 0.30 0.43 0.72 0.68 1.13 0.52 0.58 1.68 0.23 0.10 0.10 2.49 0.73 0.30 0.51 0.27 2.00 0.88 0.68 0.97

Thailand export import 0.70 0.34 0.01 0.40 0.01 0.11 0.00 0.59 5.83 0.84 1.08 0.89 1.41 0.66 0.19 0.36 2.07 0.59 0.95 0.18 0.39 0.07 2.44 0.01 0.04 0.12 0.23 0.26 0.07 0.29 0.29 0.19 0.22 0.23 2.78

0.70 0.78 0.59 1.96 0.27 1.38 2.31 0.57 0.15 0.39 0.20 0.68 0.73 1.57 1.97 0.27 0.24 2.28 0.65 0.53 0.89 0.52 1.40 0.22 0.24 0.97 0.59 2.43 1.09 0.79 2.42 1.59 1.85 1.55 1.06

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Appendix 4

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APPENDIX 4 – cont’d China

SITC Commodity 742 743 744 745 749 751 752 759 761 762 763 764 771 772 773 774 775 776 778 781 782 783 784 785 786 791 792 793 812 821 831 842 843 844 845

Pumps for liquids, etc. Pumps n.e.s., centrifuges, etc. Mechanical handling equipment Non-electr machy, tools n.e.s. Non-electr machy parts, acces Office machines Automatic data processing equip Office, adp machy parts, accessories Television receivers Radio-broadcast receivers Sound recorders, phonographs Telecom equip, parts, acces Electric power machinery n.e.s. Switchgear etc., parts n.e.s. Electricity distributing equip Electro-medical, xray equip Household type equip n.e.s. Transistors, valves, etc. Electrical machinery n.e.s. Passenger motor vehicle, excl. bus Lorries, spec motor vehicl n.e.s. Road motor vehicles n.e.s. Motor vehicl parts, acces n.e.s. Cycles, etc., motorized or not Trailers, non-motor vehicl n.e.s. Railway vehicles Aircraft, etc. Ships, boats, etc. Plumbg, heatg, lightg equip Furniture and parts thereof Travel goods, handbags, etc. Men’s outwear non-knit Women’s outwear non-knit Under garments non-knit Outer garments knit non-elastic

export

import

0.40 0.27 0.63 0.44 0.85 3.19 1.65 1.44 1.25 4.12 3.74 1.77 2.70 0.96 1.10 0.25 3.30 0.50 1.70 0.00 0.04 0.08 0.22 2.88 5.33 0.20 0.08 0.98 3.12 1.80 7.30 4.37 4.13 4.44 4.60

0.71 1.21 1.08 1.00 1.11 0.61 0.64 1.36 0.04 0.02 0.10 1.64 1.50 1.78 0.91 1.75 0.19 2.34 1.38 0.10 0.16 0.22 0.46 0.24 0.08 0.70 1.19 0.90 0.18 0.10 0.05 0.07 0.11 0.78 0.16

Indonesia export import 0.12 0.21 0.10 0.10 0.17 0.18 0.68 0.70 1.30 4.85 3.55 0.83 0.78 0.61 1.10 0.16 0.22 0.25 0.71 0.00 0.02 0.06 0.20 0.91 0.15 0.04 0.02 0.12 0.46 2.40 1.65 2.81 2.83 3.43 2.08

2.62 1.70 1.64 1.49 1.66 0.51 0.20 0.05 0.43 0.18 0.04 0.33 0.34 0.46 0.54 0.56 0.35 0.08 0.66 0.12 0.81 0.49 1.34 4.46 0.41 0.57 0.16 9.59 0.23 0.04 0.04 0.01 0.01 0.06 0.01

Malaysia export import 0.07 0.38 0.15 0.16 0.29 1.27 2.96 4.37 4.36 9.67 6.39 2.07 1.29 2.04 0.69 0.12 0.64 4.88 0.93 0.01 0.01 0.02 0.06 0.44 0.24 0.02 0.13 0.08 0.36 1.49 0.11 0.33 0.23 0.67 0.61

0.79 1.37 0.85 0.74 1.13 0.41 0.70 1.77 0.18 0.23 0.24 1.28 1.87 2.87 0.69 0.43 0.32 6.53 1.94 0.25 0.34 0.26 0.17 0.27 0.24 1.06 0.52 0.50 0.18 0.15 0.17 0.05 0.04 0.13 0.02

Philippines export import 0.14 0.17 0.10 0.05 0.15 1.38 4.31 3.85 0.42 1.67 0.06 0.89 0.63 2.14 2.85 0.01 0.14 10.55 0.37 0.00 0.00 0.01 0.83 0.49 0.09 0.00 0.20 0.20 0.42 0.88 4.16 1.79 3.55 3.17 2.07

0.42 0.53 0.67 0.64 0.50 0.51 0.16 4.16 0.13 0.28 0.16 1.77 1.12 1.88 1.31 0.25 0.27 4.82 0.79 0.09 0.41 4.46 0.39 1.95 0.32 0.23 0.23 0.08 0.23 0.15 0.10 0.01 0.01 0.23 0.01

Singapore export import 0.52 0.54 0.61 0.29 0.93 1.53 4.55 3.72 0.98 3.32 1.53 1.24 1.37 1.63 0.53 0.18 0.68 6.05 1.62 0.01 0.03 0.02 0.15 0.52 0.20 0.01 0.36 0.71 0.20 0.09 0.16 0.20 0.19 0.28 0.85

0.91 0.76 1.25 0.56 1.05 1.62 1.47 3.38 1.03 1.27 1.50 1.21 1.53 1.67 0.80 0.30 0.41 4.83 1.46 0.17 0.33 0.23 0.25 0.54 0.29 0.74 2.09 0.54 0.42 0.31 0.53 0.23 0.32 0.39 0.62

Thailand export import 0.22 0.67 0.22 0.13 0.56 1.62 0.92 4.05 2.95 2.33 1.17 0.90 2.42 1.63 1.06 0.03 2.31 1.95 1.00 0.20 1.97 0.01 0.33 1.49 0.08 0.01 0.04 0.01 0.75 1.26 3.35 1.32 1.25 1.14 2.24

1.00 1.25 0.71 1.03 1.62 0.58 0.53 2.01 0.15 0.51 0.37 1.20 1.29 1.89 1.54 0.29 0.32 2.64 1.36 0.06 0.12 0.40 1.13 0.46 0.12 0.29 1.41 0.41 0.14 0.11 0.28 0.01 0.02 0.06 0.09

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Appendix 4

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APPENDIX 4 – cont’d China

SITC Commodity 846 847 848 851 871 872 873 874 881 882 883 884 885 892 893 894 895 896 897 898 899 941 951

Under garments knitted Textile clothing accessories n.e.s. Headgear, non-textile clothing Footwear Optical instruments Medical instruments n.e.s. Meters and counters n.e.s. Measuring, controlg instruments Photogr apparatus, equip n.e.s. Photogr and cinema supplies Developed cinema film Optical goods n.e.s. Watches and clocks Printed matter Articles of plastic n.e.s. Toys, sporting goods, etc. Office supplies n.e.s. Works of art, etc. Gold, silver ware, jewellery Musical instruments and parts Other manufactured goods Zoo animals, pets, etc. War firearms, ammunition

export

import

2.83 3.95 7.17 5.77 1.19 0.44 0.68 0.34 1.94 0.59 0.02 1.84 2.54 0.45 1.87 6.29 1.85 0.05 1.58 0.60 3.43 0.69 0.01

0.05 0.22 0.10 0.02 3.40 0.43 0.41 1.31 1.27 0.71 0.07 0.65 1.09 0.51 0.53 0.12 0.32 0.01 0.17 0.83 0.50 0.79 0.05

Indonesia export import 2.71 1.20 1.99 4.15 0.25 0.07 0.85 0.02 0.89 0.04 0.00 0.83 0.03 0.10 0.50 0.60 0.79 0.06 0.56 0.94 0.99 0.66 0.03

0.03 0.06 0.17 0.01 0.09 0.29 0.88 0.55 0.07 0.70 0.94 0.06 0.05 0.24 0.33 0.14 0.52 0.01 0.01 0.17 0.42 0.19 1.58

Malaysia export import 0.55 0.67 4.40 0.15 0.65 0.45 0.26 0.76 2.84 0.26 0.02 0.45 0.67 0.29 0.77 0.45 0.83 0.02 1.53 0.64 0.19 0.35 0.17

0.04 0.23 0.26 0.10 0.61 0.40 0.38 1.66 1.17 0.56 0.10 0.72 1.10 0.52 0.78 0.21 1.33 0.02 0.47 0.51 0.24 0.25 0.18

Source: Calculated according to the trade data from UNCTAD Handbook of Statistics Database.

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Philippines export import 2.00 1.25 1.26 0.36 0.70 0.14 0.08 0.17 2.94 0.00 0.05 0.02 2.06 0.06 0.35 0.82 0.04 0.01 0.32 0.19 1.29 0.73 0.04

0.11 0.25 0.22 0.17 0.23 0.39 0.43 0.51 1.08 0.83 0.54 0.12 0.80 0.64 0.85 0.20 0.49 0.00 0.06 0.22 0.54 1.25 0.13

Singapore export import 0.64 0.18 0.13 0.15 0.58 1.08 0.15 0.93 1.32 2.34 0.03 1.27 1.93 1.27 0.56 0.24 1.38 0.09 0.58 3.49 0.44 0.29 0.00

0.62 0.35 0.23 0.25 1.06 0.53 0.31 1.22 1.82 2.35 0.23 1.04 2.02 0.65 0.59 0.32 1.20 0.11 1.45 1.57 0.27 0.43 0.01

Thailand export import 2.10 0.83 3.06 1.91 0.82 0.64 0.20 0.18 1.66 0.06 0.18 1.15 1.85 0.20 0.91 1.41 0.78 0.01 4.40 0.67 0.87 4.65 0.10

0.10 0.16 0.13 0.05 0.32 0.33 0.70 0.85 0.58 0.68 0.93 0.81 1.17 0.39 1.48 0.22 1.29 0.00 0.57 0.71 0.46 0.13 0.22

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NOTES

1

2

3

4

5

6

7 8 9

10

The low-priced manufactured products here refer to the labourintensive consumer goods and medium-technology producer goods. Here ASEAN is considered as a whole group, comprising Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand. All products are segregated into four groups, namely, agricultural products, primary products, relatively more labour-intensive manufactures and relatively less labour-intensive manufactures. ASEAN-5 includes Singapore, Thailand, Malaysia, Indonesia and the Philippines. Lim, D.C. and Mike Leu Guo-Jiun, “ASEAN-5 and China: Trade Competitors?”, East Asian Economic Issues 3 (1997), Singapore: World Scientific Publishing Co. Pte. Ltd. LIM refers to labour-intensive manufacture. For the commodity list, see Tyers et al. (1987), p. 359. Tyers, et al. (1987), p. 347. Ibid, p. 339. Calculated from IMF, Direction of Trade Statistics, Washington D.C.: International Monetary Fund, various issues. Trade intensity index is to measure the bilateral trade relations between two countries (or blocs), which is the share of a country’s export with another country (or bloc) as a proportion of the latter’s share of the world import. There exists comparatively closer trade relations between two countries, if the index is over 1. And, the higher the index, the closer trade relations is and vice versa. Ii =

Xi Xi

/

Mj Mw - Mi

Xij refers to the export of country i to country j Xi refers to the total export of country i

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Notes

11 12

13

14

15

16

17

18 19

69

Mi, Mj,, Mw refer to the total import of country i, country j and the world respectively. See Drysdale and Garnaut (1982). ASEAN’s new members are Vietnam, Laos, Cambodia and Myanmar. Calculated from the data in Yearbook of Foreign Economic Relations and Trade of China, relevant years for 1990–2002, and for 2003. SITC 75 refers to office machines and automatic data processing machines; SITC 77 refers to electrical machinery, apparatus and appliances, n.e.s., and electrical parts thereof. SITC 33 refers to petroleum, petroleum products and related materials. For the discussion on intra-industry trade, please see Grubel and Lloyd (1975), Tharakan (1983), Havrylyshyn and Civan (1985) for details. Here, we use the Grubel and Lloyd measure (GL) which is: GLij = 1 –  Xij – Mij  / (Xij + Mij ), where Xij and Mij respectively stand for the export and import of commodity j by country i with another country. Because of unavailable data, the data used in this analysis is the Harmonized Commodity Description and Coding System (HS) at the 2-digit level. This is the limitation of the article, not to be able to analyse at a more disaggregate level. Nevertheless, it does show the trend. The closer the GL index is to unity, the higher the extent of intraindustry trade is; the closer the GL index is to zero, the lower the extent of intra-industry trade is. Here, we consider that the extent of intra-industry trade is rather high when the GL index is over 0.8. In regard to growth contribution, we can define the percentage growth in total trade of commodity i (tti) over a period is given by: tti=Cnti+Ciiti, where Cnti=(1–GLi)nti, Ciiti=GLiiit. Cnti and Ciiti stand for the contribution of nti (growth in the net trade of commodity i) and iit (growth in the intra-industry trade of commodity i)i respectively, GLi refers to the intra-industry trade index of commodity i at the beginning of the period. Please see Menon (1996) for details. ASEAN-4 refers to Indonesia, Malaysia, Philippines and Thailand. According to World Development Indicators 2004, countries with GNI per capita between US$763 and US$2,935 are lower middle

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70

20

China-ASEAN Trade Relations

income economies, countries with GNI per capita between US$2,936 and US$9,075 are upper middle income economies. The Finger-Kreinin index is defined as: 

Xl

 S (i , k )=  ∑ Minimum  

ik

 X ik 

l

X jkl   , X jk  

   × 100 , where X and X are the ik jk 

export of countries i and j to market k respectively, and X lik , X ljk denote the export of commodity l in countries i and j to market k respectively. The value of S (ij , k ) is among 0 and 100. The higher the index is, the more similar export structure is, and vice versa. (see Finger and Kreinin, 1979; Pomfret, 1981; and Australia Productivity Commission, 2002). 21

22

23

The ratio is defined as:

RCA ij =

X ij Xi

/

X wj Xw

where Xij = country i’s export of product j to the world Xi = country i’s total merchandise exports to the world Xwj = world export of product j Xw = world total merchandise exports Therefore, if RCAij >1, the country i reveals a comparative advantage in the export of product j to the world; if RCAij