China's Rise and Structural Adjustment in NIEs and ASEAN -Competitors or Complements-

June 2005
Matthew Poggi

This series explains recent economic and financial topics in a plain and concise manner for a wide range of readers. The views expressed in the report are those of the authors and do not necessarily reflect the views of the Bank of Japan.

Comments and questions as well as requests for hard copies should be addressed to Yoshikazu Morimoto, International Department (yoshikazu.morimoto@boj.or.jp).

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China's economic rise has led to an increase in demand for NIEs and ASEAN exports, but has also increased competition for these countries' exports to third countries. It has also generated the side effect of industrial structural reform. It is, however, difficult to quantify the extent to which China acts like a competitor towards NIEs and ASEAN with respect to trade and the degree to which industrial structural adjustment has taken place. This article tries to give some insight on these issues by analyzing detailed trade data. In addition, export functions for the NIEs and ASEAN countries are estimated to determine whether China's growing global presence is having an adverse or beneficial impact on neighboring countries' export performances.