China’s vast size and unbalanced development levels between its internal regions with their respective levels of industrial stages andcomparative advantages enable China to cooperate efficinelty with different countries in the region and in the world be it poor or rich, advanced or underdeveloped both veritucally and horizontally. This is to say that, China’s multi-layor and unbalanced economy enables the country to cooperate with variety of countries at different stages by giving a full cooperation in East Asia.
When theforeign direct investment began horizontally spread to China and to other East Asian countries, the early existed initiaitves such as the flying-geese and ladder patterned intra regional industrial trade and linkages were transformed into a chaos of comeptition in which countries in the region had started to compete with each other for more capital and financial resources and for an export market.It is often the case for China, not China facing a greater or direct competition but the other countries in the region who face a direct comptition with Chinese products.
Indeed, the rise of China and its rapid economic growth had a great impact on the traditional economic relations in the region and to the division of labour. Traditionally, trade was patterned under north-south linages with thecomparative advantages, but since the drastic transformation in the East Asian trade relations form 1990s, the traditioanl linkage was replaced by vertical division of labour, which wasexpanded susbtantially in East Asia partly due to the global trade of spare parts. Countries such as Japan, United States and the EU took advatange from the manufacturing network in East Asia and outsourced theirlabour intensive products to China and to ASEAN countries for processing and assembling. This no doubt, had increased heavy dependency on extrategional trade in final goods.
China’s integration with global and regional economies made it an ideal venue for product processing, assembling, and centre of global manufacturing networks in East Asia. However, from a longterm perpsective China willface many obstacles in the future due to the maturation of manufacturing networks around the world, the added rate would slowly decline along with the position of manufactirng in economic growth. Therefore, it is essential for China to plan and initiate policies which will not only base its economic growth on manufacturing but as well as developing a service based industries as future growthengine, even though they will face some challenges in the first hand due to language possibilities, which can be solved faster than it might think.
China - engine for growth
Since early 2000, China’s contribution to the global GDP growth almost doubled the contribution from BRIC countries other three members namely Brazil, Russia and India. According to World Bank China’s growth between 1980-2000was 14 percent, lower than the USA 20.7 percent but higher than Japan 7 percent. The UN report on “ World Economic Situation and Prospects for 2003” had acknowledge that China has become the locomotive for Asian economic growth.
Today China accounts for half of the world’s consumption of cement, 30 percent of coal, and 36 percent of steel. It is the largest contributor to the world tradegrowth after United States and European Union. However; China’s global trade has a negative side effect to it namely its dependance on oil, raw materials and energy resources that has greater implications for its national security and sustainable economic growth. Therefore, China also needs to look for an alternative solutions such as exploration of renewable energy and sustainable development....