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The Evolution of the World Economy

The ‘Flying-Geese’ Theory of Multinational Corporations and Structural Transformation

Terutomo Ozawa

The world economy is near a critical crossroads, as a rising China, the greatest-ever beneficiary of US-led capitalism, ironically dreams big to replace America's supremacy as a new hegemonic power with a non-liberal world order. This third volume of the trilogy on ‘flying-geese’ theory reformulation explains how capitalism has changed industrial structures across the world. Using structural development economics and political economy analytics the unfolding changes in the global industrial landscape are examined in depth. Will the ‘flying-geese’ formation survive the formation that has produced the East Asian miracle and is hoped to spread to Africa?
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Index

The ‘Flying-Geese’ Theory of Multinational Corporations and Structural Transformation

Terutomo Ozawa

Africa see South Africa; sub-Saharan Africa

Akamatsu, K.

crediting List 5, 22

education 16, 22

identification of three patterns 4, 11, 22

identifying MPX progression as fundamental 5–6

influenced by German Historical School 17, 21–3

influenced by Hegelian dialectics 8, 16

lack of reference to Hume 16, 21–3

long-term growth model with alternating periods 8–9

nationalism 16

originator of flying-geese theory 3

plotting time-series trend lines 5

stages model 17–19

structural change 14, 16–19, 24

theory built on Japan’s industrial development 14

unexplored issues

accomplishment of capital intensification and technological advance 9

beyond MPX progression 8, 15

demand-side consumption factors 15

dimensions of mass consumption and massive financial flows 15

FG sequence of MPX 10

MNCs 6

Alden, C. 153

Alter, R. 134, 182

Amsden, A.H. 12, 67, 101

‘anti-trade' FDI 71–85

Aoki, M. 112, 182

Arbess, D. 175, 180

Arndt, H. 35, 73, 182

ASEAN-446, 113, 122–3, 144, 159

Asian Development Bank (ADB) 167

Asian Infrastructure Investment Bank (AIIB) 167–9

Atsmon, Y. 51, 54

Au, K. 192

Balassa, B. 154, 183

Baldwin, R.34, 183

Barton, D. 170–171

Beardson, T. 146, 183

Belderbos, R. 112, 183

Bellak, C. xii

Bhagwati, J. 79, 154

Bonacich, E. 47, 183

Brautigam, D. xii, 135–7, 140, 142, 153

Brazil 65

Bremmer, I. 96–7, 99

BRIC 124

BRICS 43, 48, 98–9, 126, 150, 167

British Classical School

rejection by Akamatsu 23

relationship with German Historical School 21–2

Broadman, H.G. 126, 153

Browne, A. 163–5, 174

Buckley, P. x, 76

Burgenmeier, B. 56, 184

Cambridge School of Economics 93

catch-up

approach 28–30

China

benefiting from FDI-driven 12, 63–4

debunking view of democracy 165

economic rise, shortening process of 62

model, effective at kick-starting industrialization 164

rise in, impacting global trade 159

and currency 148

development 15, 94, 100

developmental state model as policy for 95–6

Japan’s 3, 5, 55, 72, 108

MNCs as instrument of 8, 83–4, 90

national strategy through infant-industry protection 5, 62

NIEs 113

signs of tandem, in Africa 150

speed and scope determined by advanced knowledge 103

catch-up economies

absorbing advanced technology 92

government-led, in East Asia 89–90

MNCs spawned by 89

neo-mercantilist strategies 91

seeing value of home-grown multinationals 90, 100–103

catch-up growth

China

critical issue confronting 45

graduating from first phase 85, 117, 162

labor- and export-driven strategy 124

leading in global race of 13

model of 96–100, 118, 142, 159

definition 103

East Asian

ideal business milieu for success in 158

in staggered fashion 122–3

end of story 8

FDI-fueled strategy as initiator for 7, 30

flying-geese (FG) patterns of 55

Japan losing comparative advantage as result of 72

MNCs as priority strategy for 144

rates comparison 157–8

S-shaped trajectory 30–32, 54

stages 24, 68–70, 103, 105

‘input-driven’ 30, 31, 117, 141–2

and state capitalism 96–100, 118, 159, 166

state involvement in 92–5, 118

catch-up industrialization

basic pattern of MPX sequence under infant-industry protection, as driver of 14

China’s model effective at kick-starting 164

export orientation as core strategy of 3–4

FDI as ignition for 68–9

fueling possibility in Africa 140–141

‘lateness’ and rapidity of 105

low-ranking economies’ opportunities for 180

strategies 65–7

‘take-off’ stage of 58

trade, as only driver of, originally 6

Caves, R. 73, 184

caveat to stages theory 28–30

chaebols65–6, 69, 114

Chang, H-J. 41, 184

Chen, V.Z. 117, 139–40

‘Chimerica' 162–3

China

additional liability of being Chinese 139–40

Africa’s backlash against 151–2

authoritarian capitalism 98, 164

China-Africa Development Fund 127, 136–8

China dream 162, 174

China-side factors 143–4, 147–51

Communism's endgame 173–6

Communist Party 42, 93, 96, 98, 117, 162, 165–6, 171–3, 176

communist regime

ending, by joining democratic world 178–80

theory of middle-class-led democratization 170–173

diasporas 102, 110, 129, 131, 133, 151–2

economic relations with Africa 121–2

effect of exogenous productivity gain 82

effect of technological progress in export sector 81–2

emulative product development on side-ladder 37–9

example showing relevancy of stages model 115–17

FDI in Africa's manufacturing 121, 123–6, 148–9

concentration of 141

configuration of 127–34

inexperience with outward 139–40

labor mobility 146

new genre of 137, 140–141

‘pro-trade’ theory 144

‘right’ type of 136

FG formation led by 138–52

how free trade benefits real per capita incomes 80–81, 84–5

inward FDI, of 53, 63, 69, 81–2, 144

leader-follower relations 158–60

manufacturing FDI

diaspora formation and networking 131

Ethiopia attracting 136

evolutionary development of 132–4

new genre of 137, 141

reliable statistics on 127–8

vanguard of 128–30

as most promising investor in low-end manufacturing 124–5

new growth phase 83–4

open-door policy 62, 81, 142, 144–5, 148, 165

outward FDI 117, 126, 139, 148

regional dominance 167–70

relations with US

implications of Samuelson’s analysis 83–5

US policy mistake 162–7

rural reservoir of labor 144–7

state capitalism 89, 96–100, 117–18, 159, 164

state-owned enterprises (SOEs) 97, 99–100, 110, 128–9

Clegg, J. xi

Cold War 2.0

ending, by China joining democratic world 178–80

possibility of military confrontation 176–8

comparative advantage

augmentation 35, 74, 78, 144

doctrine of 19, 35, 39–40, 75–6, 78–9

dynamics of MNC-impacted 71–85

endowment-based 31, 40, 60, 68, 70

inter-industry trade reflecting 35

relaying 45–7, 104–7, 122–3, 140

Ricardo-HO hybrid model of 75–8

competitiveness, unique source of 131

consumerism see mass consumerism

consumption

and advanced market MNCs 36–67

behaviors 29, 43, 173

China shifting to consumption-driven economy 170–175

domestic 17–18, 31, 83, 85, 116

MNCs as promoters of 44

stages-theoretic framework for 50–54

cross-border supply chains 7, 33, 47–50, 90

Cuba

as last bastion of old-style communism 166

MNCs attracted to 43, 51

US relations 51, 164, 166

democratization, theory of 170–173

developmental states 89–90, 95–6, 104, 118

Dunning, J.H. 59, 72, 104, 119

Eatwell, J. x, 93

economic development

capitalism as powerful engine of 164

as derived phenomenon 103

as series of structural changes 118

see also ladder of economic development

educating and training 65

‘efficiency/inspiration-driven' modality of growth 30–31

entrepreneurial settlers 128–30

entrepreneurship development 66

Ethiopia

attracting China’s manufacturing FDI 136–7, 142

as follower goose 142–3

labor-driven phase of catch-up more likely in 142

survey on Chinese investment in 130

Europe

adoption of strategic trade policy 112

attracting Chinese acquisitions 117

China exporting labor-intensive manufactures to 81–2

doctrine of infant-industry protection taken up by 41

early post-war recovery 145

Eastern, reform 175

Ethiopia as base for exports to 136

Everything But Arms (EBA) initiative 134

FDI across Africa 138, 149

leadership in, and rise of East Asian economies 158

lifting sanctions against Myanmar 45

as losing ground in high-tech market 180

majority of leading consumer products from 50

as matured and stagnant 159

percentage of world manufacturing value-added 122

predecessors of MNCs traced to trading companies from 91

rapid technological and structural changes 91

stages theory of growth based on early industrialization 28

export promotion (EP)

Akamatsu’s and List’s perspectives on 18

cum import substitution (IS) 4–5

impact of MNCs 7

and infant-industry protection 11

‘factor-price magnification' theorem 144

FDI

cum-aid resources diplomacy 104–7, 109–10, 118

inward

China’s 81–2, 144

classification of 53

fully packaged factory transplantation as 31

Japan’s avoidance of 108

and MNCs 102

more open regimes 45

in MPX progression 7, 11–13, 15, 63

pro-trade or anti-trade 84

outward

China’s 117, 126, 139, 148

and MNCs 102

in MPX progression 7, 10–13, 15

pro-trade vs. anti-trade 71–85

role in catch-up industrialization 65–70

FDI-led industrial take-off

vs. infant-industry protection approach 58–61

moving from infant industry protection to 62–3

Ferguson, N. 160–162

flying-geese (FG) theory of economic development

Akamatsu as originator of 3

basic pattern 4–5, 18

China’s flying-geese formation 138–52

developments requiring incorporation 15

FDI-driven

China 11–12, 141–3, 148–9

growth efficacy 71, 84

process of MPX 7

FG-style catch-up 141

FG-style growth 15

China’s Communist regime 170–176

hegemonic leadership, change of 160–167

leadership and follower capacity 157–60

possibility of Cold War 2.0 176–80

regional dominance in rising China 167–70

FG-style leader-follower relations 140

fundamental/basic pattern of 4–5, 14, 17–18, 22

and ‘history repeats itself’ aphorism 55

List’s stages model as foundation of 17

need for reformulation 14–15

as outdated 3

post-MPX process 8–13

and rise of multinationals 6–8

role of nationalism in 16

same mechanism as cross-border transmigration of manufacturing 16

structural change 14

in sub-Saharan Africa 135–52

flying-manufacturers theory

Akamatsu’s failure to notice 22–3

essence of 19–21 [Please change ‘critique' to ‘essence']

as precursor of flying geese theory 19–20

follower capacity 157–60

foreign-brands substitution 83

Free Trade Area of the Asia Pacific (FTAAP) 167, 169

French, H.W. 130, 134, 140, 147, 151

frugal innovation 36–7

full-circle model

role of MNCs in 9–11

theoretical implications of 11–13

fundamental/basic pattern of FG formation 4–5, 14, 17–18, 22

German Historical School

growth-stages model of 17–19

influence of 16–17, 22–3

relationship with British Classical School 21–2

Germany

averse to global leadership role 159

Japan’s intensive use of resources from 111

joining China-led AIIB 168

Mittelstand, as backbone of economy 129

resorting to infant industry protection 62

Gerschenkron, A. 28–9, 58–9, 103

globalization

Akamatsu’s theory in light of 3

Samuelson’s skepticism about 80–84

trends of 112–13

Gray, H.P. 72, 76

growth-stages model 17–19, 22

Gu, J. 129, 133–4, 150, 155

Hamilton, A. 16, 41, 45, 68

Heckscher–Ohlin (HO)

and Ricardo hybrid model of comparative advantage 75–8

trade theory 73–4

hegemonic leadership 157, 160–167

Highfil, J. xii

Hirsch, S. 57, 73, 101–2

Horn, S. xi

Huang, Y. 194

Hume, D. 13, 16–17, 19–22

Huntsman, J., Jr. 175, 180

Hymer, S. 73, 79

import, production, export (MPX) process/progression

Akamatsu’s and List’s perspectives on 18, 22

also known as IS-EP process 4

as basic or fundamental 5, 18

as controllable activity by catching-up countries 4

driven by infant-industry protection 6, 14, 19

ideas of, originating from List 5

impact of MNCs 6–7

need for reformulation 15

pattern discovered in Japanese manufacturing industries 5, 22

as pattern of FG formation 4

post-process 8–9

role of MNCs 9–11

theoretical implications 11–13

import substitution (IS)

Akamatsu’s and List’s perspectives on 18

and China 82

‘closed economy’ strategy of 64

cum export promotion (EP) 4–5

Hamilton-List approach 68

impact of MNCs 7

and infant-industry protection 11, 62–3

Latin American paradigm 141

see also import, production, export (MPX) process/progression

India

as active retailers in low-end electronic goods 51

democratic capitalism 98

frugal revolution 36

outsourcing boom 43–4, 80

taking advantage of African trade preferences 153

use of abundant labor 125

industrial policy 59, 93, 114

industrial space 32–3, 111

industrial structural policy 95–6, 107–9, 111

industrial transmigration

background 121–2

China as most promising investor 124–5

China’s FDI configurations 127–34

China’s renewed presence in Africa 126

East Asian style 122–3

flying-geese (FG) formation, 138–52

government-supported manufacturing projects 134–8

new round of 45–6

promising sign of 136

industrial upgrading

critical catalyst of 12

inter- 24–6, 33–4

Japanese 95, 106–7

outcome of trade-driven industrial development 5

speed of 53

two types of 24

US-led 40

industrialism

age of 39–40

shift to consumerism 39–40, 42–5

UK-led 40–42

industrialization

Africa’s low level of 122

catch-up 3–4, 6, 14, 58, 65–7, 105, 140–141, 164, 180

China’s involvement in Africa’s 132–4, 138

FDI as ignition for 68–9

perspiration and inspiration 30

role of multinationals in 62–4

stages of 104–5

technological progress for 103

tiers of see ladder of economic development

infant-industry protection

as catch-up strategy 5, 14

effect of stronger 41

FDI as more expedient alternative to 7, 12, 45

FDI-led industrial take-off

moving towards 62–4

versus 58–61

idea originator 22

less use as motivational trigger 7–8

model of MPX progression driven by 6–7

MPX phase as strategy of 11

for national industrial development 16, 22

promoting development of manufacturing industries under 18

innovation and technology diffusion 66

‘input/perspiration-driven' modality of growth 30–32

institutional reform 30–32, 60–61

inter-industry trade

in cloth and wine example 78

as conventional 7

S-shaped trajectory of growth 54

shift to higher-value-added goods 14

unbundling 34

upgrading 24–6

International Monetary Fund (IMF) 148, 158, 162, 167, 169

intra-industry trade

activity-packed industrial space 32–7

China’s emulative product development 37–9

cross-border supply chains 47–50

monopolistic competition theory of 34–6

more rapid growth 7

shift to higher-end goods 14

Taiwan’s electronics industry 115

vertically integrated 32–6

Japan

Asahan formula 108, 110

assimilation of Western values 158, 180

attracted to Chinese markets 116

bottleneck 55

capability of absorbing advanced foreign technology 12

catch-up 5, 72, 122

‘challenge and response’ mechanism 32

and China relations 147–8

dismantling low-end manufacturing and service 147

FDI-cum-aid resources diplomacy 104–7, 109–10, 118

FDI-type 71–3

flying-geese (FG) theory originating from 3, 5–6, 22

‘hollowing-out (or doughnut)’ effect 149

Ju-ko-cho-dai [heavy-thick-long-big] 111

Kei-haku-tan-sho [light-thin-short-small] 111

keiretsu69, 139

limited reserve of rural labor 146

MNCs 29, 49–51, 89, 115

national development strategies 95–6

national emigration plan 102

overseas investment 73, 109–10

post-war basis for rapid growth 145

as precedent-setter in comparative advantage relaying 104–7

pursuing IIP strategy 68

resorting to infant industry protection 62

from resource-based to knowledge-based economy 111–13

shedding off low-wage production abroad 9–10, 13, 118–19

small and medium-sized firm sector 144–5

SOEs 99

sogo shosha 106

state role in industrial structural policy 107–9, 111

taking advantage of Britain’s economic liberalism 41

technology transfer 72

Toyota production system

China imitating 38

as consumer-focused multinational 52

flexible (or lean) production 48, 112

setting up in Africa 150

Toyota New Global Architecture 48–9

Johnson, C. 89, 95–6

Keynes, J.M. 41–2, 57

‘kicking away the ladder' 40–42, 44, 54, 138

Kindleberger, C.P. 73, 145

Kipping, M. xii

knowledge-based economy 111–13, 172

knowledge-based growth stages 98, 113

see also ladder of economic development: tiers 3-5

knowledge diffusion 66–7, 118

Kojima, K. 71–7, 106, 110, 144

Krugman, P.R. 10, 25, 30, 34–6, 117, 145

Kurosawa, T. xi

labor shortages and wage hikes 55, 105, 116, 124–5, 143–4

‘labor shortages in a labor-abundant economy' paradox 144–7

ladder of consumption 50–54

ladder of economic development

catch-up approach 28–30

criticality of institutional and market reforms at different growth phases 31–2

historical pattern of structural changes 26–8

from industrialism to consumerism

UK-led industrialism 39–42

US-led mass consumerism 42–5

inter-industrial upgrading, main ladder 24–6

intra-industry trade, side ladder 32–9

ladder of consumption 50–54

S-shaped growth curve, bottlenecks and institutional reforms 30–31

in structuralist perspective 24

study summary 54–6

supply chains

comparative advantage recycling in Tier 1 industries 45–7

cross-border 47–50

tier 1: endowments-driven industries 26–7

capital/labor intensity ratio 33

catch-up starters growth rate during 157–8

in China 115

comparative advantage recycling in 45–7

criticality of institutional and market reforms 30–31

introduced under British hegemony 39–41

in Japan 106–7, 118

MNC-type 104

in NIEs 113

requiring strong government commitment 60–61

state involvement 105

tier 2: resource-processing industries 26–7

capital/labor intensity ratio 33

catch-up starters growth rate during 157–8

in China 115

criticality of institutional and market reforms 30–31

introduced under British hegemony 39–41

in Japan 108–11, 118

MNC-type 104

in NIEs 114

pollution problem 55–6

requiring strong government commitment 60–61

state involvement 105

tier 3: assembly-based industries 26–7, 30–31

capital/labor intensity ratio 33

in China 115

introduced under American hegemony 40

in Japan 111–12

MNC-type 104

in NIEs 114

requirements 61, 158

state involvement 105

tier 4: R&D-driven industries 26–7, 30–31

capital/labor intensity ratio 33

in China 115

introduced under American hegemony 40

MNC-type 104

in NIEs 114

requirements 61, 158

state involvement 105

tier 5: ICT-enabled industries 26–7, 30–31

capital/labor intensity ratio 33

in China 115–17

introduced under American hegemony 40

MNC-type 104

in NIEs 114

requirements 61, 158

and Shanzhai37–8

state involvement 105

tier 6: green and health technology (GHT) industries 26–7, 116

Laplume, A. 193

Large, D. 182

Latin America 51, 63, 102, 122, 141, 143, 164, 177

leadership

hegemonic, change of

American supremacy 160–162

US policy error 162–7

leader-follower relations 157–60

leading-sector stages model of industrial upgrading (or growth)

caveat to 28–30

growth phases 30–32

tiers corresponding to rungs of ladder of economic development 26–8, 32–3

Lewis, A.W. 119, 144–6

Lin, J.Y. 59, 94, 136

List, F. 14, 16–18, 21–3, 41, 45, 57, 68

Lubinski, C. xii

market failures 59, 89–90, 92, 94–5, 118–19

market reform 31–2, 60–61, 130

mass consumerism

age of 40

shift from industrialism to 39–42, 55

by Smithian classification 52

US-led 42–5

mercantilism 90–92

Mexico 46

middle-class-led democratization theory 170–173

Miller, S. 177, 186

MNC-impacted basis for trade 73–8

‘monopolistic competition' theory of trade 34–6

Morris, I. 160–161

MPX process see import, production, export (MPX) process/progression

Mucchielli, J. 56. 184

multinationals (MNCs)

in Africa 149–50, 162–3

consumer-focused 52

as a creature, and an instrument, of structural transformation/change 28–9, 118

fusion between state and business 92–100

from mercantilism to neomercantilism 90–92

nurturing national enterprises as 100–103

as a critical joint input in industrial modernization 100

East Asian economies, experience of

China 115–17

Japan 104–13

NIEs 113–15

emerging markets

advances into 43–4

rise of, from 89–118

sector coverage in 51–3

using as catch-up instrument 8, 29

and frugal innovation 36–7

home-grown 101, 103, 105, 118

investing, in China 13, 53, 69, 81–5

learning from, in China 37, 44, 63

as main driver of structural upgrading 54

metamorphosis of configurations 40

as powerful jump-starter of industrial growth 45, 64

production fragmentation 35

rise of 6–8

role

in catch-up process 66–7

as global spreaders of industrial knowledge and institutions 29

as major industrial transplanter and knowledge disseminator 9–11, 14–15

in provision of jobs in emerging countries 45

in sparking industrialization 62–4

stages-specific types of 103–4

Mundell, R. 73–5

Myanmar 43, 45–6, 51, 113

Myers, R. 114, 189

Myint, H. 19, 189

Myrdal, G. 133, 189

Nakajima, M. 15, 192

Nathan, A. 163, 189

national development strategies 95–6

national enterprises 100–103

neomercantilism 90–92

NIEs (newly industrializing economies)

assimilation of Western values 158

bottleneck 55

characteristics 113–15

dismantling low-end manufacturing and service 147

dismantling low-wage light industry 143

fast catch-ups 89, 122

industrial transmigration 45–6

labor-driven strategy 144

limited reserve of rural labor 146

national development strategies 95

open-economy approach 12

outsourcing operations 149

Nissanke, M. xii

Nolke, A. 97, 189, 191

North, D. 32, 190

North Korea 51, 166–7

Obstfeld, M. 35–6

O’Hanlon, M. 177–8

Ohlin, B. see Heckscher–Ohlin (HO)

Ohno, T. 48, 112

‘One Belt, One Road' ('New Silk Road') project 167–8

Orr, G. 178, 190

Osburg, J. 172, 190

overseas investment

China’s 116–17, 128, 139–40

Japan’s 106–12

pro-trade and anti-trade 73

Ricardo’s views on 78–9, 84–5

supporting Tier II industries 39–40

Ozawa, T. ix, 3, 5, 7–9, 12–13, 15, 19, 21, 25, 27–8, 33, 45–6, 48, 56–8, 67, 70–72, 74, 76–7, 93, 106–8, 110–112, 119–20, 139, 144–5, 164

Pakistan 168

Pathak, S. 101, 191

Patrick, H. xi

Paulson, H. 177, 178, 191

Pillsbury, M. 183, 191

Porter, M. 101, 191

Prabhu, J. 36, 192

‘pro-trade' FDI 35–6, 71–85

‘providing the ladder' 42–5, 55

Radelet, S. 3, 141

Radjou, N. 36, 192

Ren, B. 153, 192

Ricardian rents 27, 40, 42, 55

Ricardo, D. 19, 21, 84

Ricardo–HO hybrid model of comparative advantage 75–8

view on overseas investment 78–9

‘rich country, strong army' 96, 124

Rolland, N. 181, 192

Rosecrance, R. 177, 192

Rostow, W.W. 26, 42, 58, 164

Russia 91, 98–9, 124, 126, 152, 164–5, 167–8, 177

Rybczynski, T.M. 74–5

S-shaped growth curve 31–2, 54

Sachs, J. 3, 141

Samuelson, P.

foreign exchange rates theory 154

skepticism about benefits of free trade for US under globalization 80–84

and Stolper theorem 144–5

Samuelson, R. 192

Sauvant, K.P. xii, 99, 117, 139–40

Schneidman,W. 152, 192

Schroppel, C. 15, 192

Schuck, P. 94, 192

Schumpeter, J.A. 14, 22, 24–7, 30–31, 56–7

Schumpterian rents 27, 40, 42, 55

science and technology (S&T) capability 65

Scobell, A. 163, 189

Sender, H. 179, 193

Sercovich, F. xii, 58, 65–7, 68, 70

Shambaugh, D. 173–4

shanzhai37–9

Shen, N. 192

Smith, A. 19, 21, 50, 52

Soares de Oliveira, R. 182, 183

South Africa 69, 126, 133, 135, 137–8, 141–2, 150–151

South Korea

catch-up growth 122

chaebols65–6, 69, 114

developing high-tech industries 114

export-processing zones 69

free-market export processing zones (EPZs) 144

goodwill gesture to North Korea 167

innovation and technology diffusion 66

Japan shifting production to 106

as market-capitalist economy 96–7

national development strategies 95

national firms 101

participation in China-led AIIB 168

as receptive to inward FDI 12

replication of MNCs overseas business activities 105, 113

resources diplomacy for oil 114

stage-focused strategies 68–70

stages theory, caveat to 28–30

state-and-industry link 92–100, 102–3, 106, 115, 118

state capitalism 89, 96–100, 117–18, 159, 164

state involvement

in catch-up growth 92–5, 118

South Korean 114

stages of industrialization and home-grown MNCs 105

state-owned enterprises (SOEs)

Brazil 66

China 97, 128–9

emerging market MNCs 99

representing state capitalism 97, 99

Steinberg, J. 177–8

Stolper, W.F. 144–5

Strange, S. 181, 193

Strauss, J. 99, 142, 188, 192

structural change

Akamatsu’s notion of 14, 24

under American hegemony 40, 42–5

under British hegemony 39–42

driven by innovation 25–6, 118

as essence of industrialization 54

historical pattern of 26–8

MNCs as creature, and instrument, of 90–103, 118

stages model for analyzing 59, 68

structural rigidities 59, 89–90, 92–4, 118

sub-Saharan Africa

backlash against China 151–2

China’s advance into

evolutionary development of 132–4

flying-geese (FG) formation 138–52

government-supported manufacturing projects 134–8

as low-end manufacturing transmigration 122–3

as most promising investor in low-cost production 124–5

sudden rise of 126

China’s economic relations with 121–2

China’s FDI configurations

diaspora formation and networking 131

lacuna of reliable statistics on manufacturing investment 127–8

vanguard of 128–30

follower geese in 141–3

labor shortages in labor-abundant country 144–7

low level of industrialization 122

Sun, Y. 137, 193

supply chains

boundary of 33–4

comparative advantage recycling 45–7

cross-border 7, 33, 47–50, 90

as facilitating industrialization of economies 44

as ‘the second unbundling’ 34

vertical intra-industry trade and monopolistic theory of trade 34–6

Taiwan

catch-up growth 122

constrained resources diplomacy 114

developing high-tech industries 114–15

domestic SME development 66

export-processing zones (EPZs) 69, 144

innovation and technology diffusion 66

investment in textiles and clothing industries 134–5

Japan shifting production to 106

as market-capitalist economy 96

multinationals active in Africa 149

national development strategies 95

participation in China-led AIIB 168

as receptive to inward FDI 12

replication of MNCs overseas business activities 105, 113

S&T capability building policies 65

state-industry links 115

taking advantage of China’s low-end manufacturing capacity 36

Takeuchi, I. 115, 193

Tang, X. 133, 193

Teets, J. 172, 193

Thorbecke, E. xii, xiii

To, J. 102, 193

total factor productivity (TFP) 25, 30

Toynbee, A. 32, 193

Trans-Pacific Partnership (TPP) 167, 169

Tribe, K. 22, 193

Tse, E. 39, 97, 119

UNCTAD 45, 99, 126, 134, 153

United Kingdom (UK)

adoption of economic liberalism 91

Africa investment 126

attracting Chinese acquisitions 117

as citadel of Western political ideology 171

hegemony 39–41

participation in China-led AIIB 168

predicting end of American supremacy 160

UK-led global capitalism 27

UK-led industrialism 40–42, 54, 62, 160

United States (US)

American supremacy 160–162

as citadel of Western political ideology 171

hegemony 39–40, 160–165

possible US policy error 162–7

skepticism about long-term benefits of free trade for

effect of China’s exogenous productivity gain 82

effect of China’s technological progress in export sector 81–2

how free trade benefits China and US capita incomes 80–81, 84–5

implications of Samuelson’s analysis for relations with China 83–5

US-led global capitalism 27, 43, 54–5, 164

US-led mass consumerism 42–5

‘unlimited-labor-supply' growth model 144–5

Vietnam 46, 60, 99, 113, 115, 124, 136, 165, 167

Vernon, R. 73, 194

Voss, H. xi

Wade, R.H. xiii, 59, 93

Wang, Z. 167–70

Williamson, O. 73, 194

Womack, J.P. 48, 112

World Bank

adopting stages perspective 69–70

on Chinese migrant labor to Africa 143–4

contributions to upkeep 158

market-primacy neoclassical economics, thinking dominated by 59

need for engagement with outside world 162

persuading China to invest in Africa 46, 69, 121–2, 125, 153

survey on Chinese investment in Ethiopia 130, 136

working paper on migration of Japanese industries 72

Xavier-Oliveira, E. 191

Young, S. xii

‘Youwei’ 174, 178

Zakaria, F. 161, 194

Zeihan, P. 161, 194