ABSTRACT
Current trends in the international political economy are simultaneously restructuring global and regional divisions of labour and affecting the power and well-being of states, corporations, financial institutions, classes, groups and individuals. Central among these trends is acceleration of a transition that has been under way since mid-century between an 'international economy' of classic arm'slength trading relationships and a 'world economy' comprised of transnational production networks. The distinction comes from Cox (1987), which is one of the fullest and most interesting theoretical expositions of this trend, but there are many current analyses that elaborate the same theme (Bonacich et at. 1994; Doherty 1995; Gereffi and Korzeniewicz 1994; Harrison 1994). These networks centre on transnational corporations (TNCs) that manage the activities of production sites in many countries. The stages of manufacture of their products in this new international division of labour are carried out or the parts and components of their products are made in states at different levels of industrial development. The resultant intermediate goods are traded, frequently on an intra-firm basis, for eventual incorporation into fmished products. The latter are then sold internationally and/or locally. This activity is organised both globally and regionally. Local producers may be owned or directly controlled by TNCs or they may simply be licensees or subcontractors. Development of transnational production networks is fuelled by TNC foreign direct investment (FDI) and facilitated by the public policies of the states whose economies this activity serves to integrate. TNC predominance in these networks is based primarily on their control over technology, capital and marketing mechanisms. These are world-wide processes, but no region has been more affected by them than East Asia.
