ABSTRACT
This chapter discusses the opening up of China and its attempts at policy reform and focuses on the important phenomenon of production networking in the region, which explains the close relationship between trade and investment within participating economies. It also discusses the role of China in the production network and describes the new challenges faced by China posed after the Global Financial Crisis and the policy changes adopted henceforth. G. Yip and B. McKern noted that China possesses several innovation enablers on both the supply and the demand sides. The chapter analyzes the patterns of international trade and investment during the development process of China thereby highlighting the phenomenon of supply chain in the region. The development of production networking in the region was one of the major pull factors for China to get associated in the supply chain where in foreign direct investment goes in hand with trade.
