ABSTRACT
An important feature of Asia's trade pattern is its increasing intraregional trade. According to the World Trade Organization (WTO), 3 intraregional merchandise trade in Asia accounted for almost half (49.7 per cent) of Asia's total exports in 2007, while Asia's exports to North America and Europe accounted for 19.9 per cent and 18.8 per cent, respectively. More importantly, trade within Asia has experienced a significant shift from traditional interindustry trade to intra-industry trade in finished goods and, more recently, to intra-industry trade in parts and components, in particular in ‘machinery and transport equipment’ industries where a large number of multilayered vertical production processes are involved. China's trade patterns mirror those of Asia. As shown in Figure 6.1, exports to other parts of Asia account for nearly half of China's total exports. In contrast, China's exports to the United States and Europe each account for about 20 per cent of its total exports. China's imports from Asia represent an even bigger share of its total imports (about 65 per cent), suggesting that it has engaged intensively in intra-industry trade in parts and components with economies in the Asian region, while exporting finished goods to markets in the developed West.
