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Production networks and international trade: China, Brazil and Mexico

Author

Listed:
  • Fung, K.C.
  • Hwang, Hsiang-Chih
  • Ng, Francis
  • Seade, Jesús

Abstract

In this paper, we examine and contrast the production networks in China, Brazil and Mexico. We highlight three results. First, over the last two decades, China's intensity of trade in parts and components has shifted from other members of Greater China to South Korea and ASEAN countries. Second, even though China's production network is mainly Asian, its parts and components trading partners are increasingly global. Brazil also increasingly trades its parts with China and East Asia, while Mexico is still focused on its trade with the United States. Third, Greater China has become a major source of parts and components to Mexican and Brazilian imports. We highlight the importance of such a pan-Pacific link and anticipate that the joint China–Brazil–Mexico production network will continue to grow.

Suggested Citation

  • Fung, K.C. & Hwang, Hsiang-Chih & Ng, Francis & Seade, Jesús, 2015. "Production networks and international trade: China, Brazil and Mexico," The North American Journal of Economics and Finance, Elsevier, vol. 34(C), pages 421-429.
    • Handle: RePEc:eee:ecofin:v:34:y:2015:i:c:p:421-429
    DOI: 10.1016/j.najef.2015.09.002
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    References listed on IDEAS

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    1. Nathalie Aminian & K. Fung & Francis Ng, 2009. "A comparative analysis of trade and economic integration in East Asia and Latin America," Economic Change and Restructuring, Springer, vol. 42(1), pages 105-137, May.
    2. Robert C. Feenstra & Gordon H. Hanson, 2005. "Ownership and Control in Outsourcing to China: Estimating the Property-Rights Theory of the Firm," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(2), pages 729-761.
    3. Blázquez, Jorge & Rodríguez, Javier & Santiso, Javier, 2006. "Angel or demon?: China's trade impact on Latin American countries," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    4. Kei-Mu Yi, 2003. "Can Vertical Specialization Explain the Growth of World Trade?," Journal of Political Economy, University of Chicago Press, vol. 111(1), pages 52-102, February.
    5. Ng, Francis & Yeats, Alexander, 2003. "Major trade trends in East Asia : what are their implications for regional cooperation and growth," Policy Research Working Paper Series 3084, The World Bank.
    6. Jorge Blázquez-Lidoy & Javier Rodríguez & Javier Santiso, 2006. "Angel or Devil? China's Trade Impact on Latin American Emerging Markets," OECD Development Centre Working Papers 252, OECD Publishing.
    7. K. Fung & Hsiang-Chih Hwang & Francis Ng & Jesus Seade, 2013. "Production networks in China and India: a comparative analysis," Economic Change and Restructuring, Springer, vol. 46(1), pages 45-69, March.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Mateus Silva Chang, 2017. "Machinery production networks in Latin America: a quantity and quality analysis," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 26(1), pages 1-35, December.

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    More about this item

    Keywords

    East Asia; Fragmentation; Global value chain; Latin America; Production networks; Trade in parts and components;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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