ABSTRACT
In the past decades, the export performance of the East Asian economies has been phenomenal. The issue of East Asian competitiveness has expanded in force as more and more products manufactured in East Asia displace goods that had been produced in the advanced countries. Recently, as China has become a powerhouse of mass production, the issue has turned from “Why is East Asia so competitive in Western markets?”, to a more focused question “Why is China so competitive in all markets?” (Western markets and those of other East Asian countries.)
Some economists, but by no means all of them, have been worried about the growing centralization of the world’s manufacturing production-not just of traditional products but also of high-tech goods. In East Asia, China is being seen as an important contributor to shifts in production and foreign investment that have affected growth of other countries in the region. In the advanced Western countries and Japan, where a large fraction of East Asian exports are directed, many people are concerned about the implications for inflation (deflation?) and manufacturing employment (unemployment). Such worry is being registered in Japan.
