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Production networks in China and India: a comparative analysis

Author

Listed:
  • K. Fung
  • Hsiang-Chih Hwang
  • Francis Ng
  • Jesus Seade

Abstract

In this paper, we examine and compare the two important production hubs in Asia: China and Greater China and India and South Asia. We show that in China, Hong Kong and Taiwan, manufacturing trade has continued to be highly relevant, with trade in parts and components growing in importance. In contrast, in India, Pakistan and Sri Lanka, trade in parts and components remain limited. We then calculate various revealed comparative advantage (RCA) indices, which China having more components with RCA values exceeding one. Some of the most important components exported by China include electronic parts and telecommunication parts. One explanation is to why India is relatively weak in parts and components trade is that India is strong in service trade. Other reasons may be related to better port infrastructure, higher research and development intensity and higher educational enrollments in China. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • 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.
    • Handle: RePEc:kap:ecopln:v:46:y:2013:i:1:p:45-69
    DOI: 10.1007/s10644-012-9133-4
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    References listed on IDEAS

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    Cited by:

    1. Richard Pomfret & Richard Pomfret, 2014. "Expanding the Division of Labour: Trade Costs and Supply Chains in the Global Economy," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 54(3), pages 220-241, November.
    2. Richard Pomfret & Patricia Sourdin, 2016. "Trade between Australia and the EU, 1990 - 2015," School of Economics and Public Policy Working Papers 2016-10, University of Adelaide, School of Economics and Public Policy.
    3. 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.
    4. Richard Pomfret & Patricia Sourdin, 2017. "Where Will Your Next Holden Come From? The 2004 EU Enlargement and Trade with Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 50(2), pages 181-194, June.

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