East Asian Production Networks and the Rise of China: Regional Diversity in Export Performance

This paper investigates regional differences within China in the degree of participation in East Asia's production and distribution networks in machinery industries. By employing customs-based export data, large regional disparity in the pattern of machinery exports as well as a hint of catching-up by late-coming regions is demonstrated. China has been regarded as a "lumpy" country in the sense of including a variety of comparative advantage due to regional differences in factor prices. The extended fragmentation theory would suggest positive agglomeration effects and differences in service link costs as additional economic elements to explain regional diversity in the trade pattern.