Economic Integration in East Asia

Economic Integration in East Asia

Perspectives from Spatial and Neoclassical Economics

Edited by Masahisa Fujita, Satoru Kumagai and Koji Nishikimi

Increasing numbers of free trade and economic partnership agreements have been concluded among many countries in East Asia, and economic integration has progressed rapidly on both a de facto and de jure basis. However, as the authors of this book argue, integration may intensify regional inequalities in East Asia and so this process has attracted much attention of late. Will it actually succeed in achieving greater economic growth or will it in fact cause growing regional disparity?

Chapter 4: Industrial Clustering and MNE Management in East Asia: Recent Progress and Prospects for the Asian Triangle

Akifumi Kuchiki

Subjects: asian studies, asian development, asian economics, development studies, development economics, economics and finance, asian economics, development economics, regional economics, geography, economic geography, urban and regional studies, regional economics


Akifumi Kuchiki INTRODUCTION 4.1 A growing number of industrial clusters have emerged in East Asia in the process of (de facto) economic integration. Multinational enterprises (MNEs) widely play a key role as anchor firms in forming industrial clusters and creating logistic links among them. These enterprises make significant efforts to organize their affiliated plants spread over Asia into an intra-firm global production network and to manage the network as efficiently as possible (value chain management). In this chapter, we overview the development of industrial clusters in the growing economies of Asia and examine how Asian economies are being regionally integrated on the basis of fragmentation and value chain management by MNEs. Among all growing economies in East Asia, China, India and Vietnam, in particular, have been achieving remarkable economic growth. As shown in Table 4.1, their average GDP growth rates from 2000 to 2004 are as high as 8.5 percent (China), 5.8 percent (India) and 6.6 percent (Vietnam). These three economies are also expected to grow continuously into the latter half of the 2000s. Recently, the Global Strategy Research Institute of Matsushita Electric Industrial Co. Ltd has forecast that a triangle with boundaries formed by China, India and ASEAN, as shown in Figure 4.1, will be a prosperous manufacturing industry production site for the world market around 2030. We designate this area the Asian Triangle. Several highway networks are now being developed to connect various cities in this triangle. For example, the Delhi–Mumbai industrial...

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