Panel Session III - Economic and financial cooperation and the regional integration
Professor Shujiro URATA Professor of Economics, Waseda University
From Regionalization to Regionalism in East Asia
Dr. Giovanni CAPANNELLI Principal Economist, Asian Development Bank Institute
Asia’s Institutional Architecture for Economic and Financial Integration
Mr. Edward Leung Chief Economist
Hong Kong Trade Development Council
Production Specialisation and Intra-regional Trade in Asia
– the Case of Electronics Industry
Production Specialisation and Intra-regional Trade in Asia - the Case of Electronics Industry
Trade in Asia has not only benefited from massive relocation of production from western countries to the region, but also the huge input demand from China in the last decade. Particularly, given increases in production specialisation, a large number of upstream and downstream manufacturers with different edges have blossomed, forming sizable industrial clusters around the region. This has resulted in frequent transactions undertaken along the region’s supplier chain, as downstream manufacturers, including those located in China, have to procure all necessary inputs before they can produce final products for exports to western countries or sales in the region. This has stimulated intra-regional trade in Asia, especially in the electronics industry where intra-regional demand especially for parts and components accounts for over half of the region’s electronics transactions.
China is the largest world electronics producer, and therefore has a keen demand for various inputs in order to meet its production orders. This in turn has made it the largest market for Asia’s electronics exports, especially for parts and components. Hong Kong is among the significant facilitators to such electronics trade, as a sizable amount of Asian parts and components is either handled by or goes through Hong Kong for re-exports to the China market, and vice versa. In fact, over half of Hong Kong’s total exports are electronics transactions, in which the majority is re-export business of parts and components.
Now China is in the process to upgrade its industries, while introducing measures to facilitate imports of technology and key components for its high-tech production. This is expected to be a boon to electronics trade in Asia, especially exports of parts and components of higher technology to China. Despite this, many Asian and foreign players remain cautious in promoting such technology trade with China, given their concerns on infringement of intellectual property rights (IPRs), financial arrangement for technology business, etc.
Hong Kong has long been serving as an effective gateway for China to purchase technological products and inputs from Asia and the international market. Given Hong Kong’s excellence in its financial services, its sound legal system reputed for its protection of IPRs, and its efficient services like logistics, coupled with its experience in parts and components business, Hong Kong can serve as an effective marketplace for Asian players to capitalise the increasing demand for inputs of higher technology from China.
Mr Leung graduated from the Chinese University of Hong Kong in 1974. He majored in Economics and was awarded the B. S. Sc. Degree. He continued his further study at the same university and was awarded the M. Phil. Degree in 1977. Besides Economics, Mr Leung had also studied Law. He was awarded the L.L.B. Degree from the University of London, and was admitted as a Barrister-at-Law by Gray's Inn of England. Mr Leung was also admitted as a barrister in Hong Kong and Canberra.
Mr Leung is now Chief Economist of Hong Kong Trade Development Council, responsible for the research function of the Council. Before joining TDC, Mr Leung was Senior Economist of Export, Finance & Insurance Corporation in Australia. Mr Leung has considerable experience in the financial sector, as he had been Chief Economist of Standard Chartered Bank and Bank of East Asia. Mr Leung is currently a member of the Hong Kong Committee for Pacific Economic Co-operation and a member of the Transport Advisory Committee of the HKSARG.
Copyright@2012 Hong Kong Institute of Asia-Pacific Studies. The Chinese University of Hong Kong. All Right Reserved.