ABSTRACT
In East Asia, the volume of trade in parts and components has been increasing over the past two decades and has been attributed to the rise in production sharing, sometimes referred to as international production fragmentation or slicing of the supply chain. Production sharing involves breaking up the production process into vertically separated stages carried out in two or more countries.1 A part or component of a product may first be manufactured in one country and then sent to another country for component assembly or further processing, then onwards again to another country for final assembly or finishing. Thus a supply chain is established – one which passes through two or more countries.
