The Export Competitiveness of the Newly Industrialised East Asian Economies: How Real is the Chinese Threat in Electronics?

This paper examines the export performance of China in electronics compared to the east Asian NIEs exporting to the USA, the European Union, and Japan between 1988 and 2001 using a dynamic version of shift-share analysis to overcome some of the inherent drawbacks of the widely-used static shift-share methodology. Our findings suggest that China has now emerged as a serious contender in the export market for electronic goods, but this position has not been a dominant one. For electronics as a whole, the principal gainers after 1995 appear to be newcomers China and Malaysia at the expense of the older Tigers, like Singapore and Hong Kong. To some extent this represents a natural process of ‘catch-up’. Moreover, no single NIE has dominated all categories of electronic exports. In the east Asian region, the less developed members of ASEAN would appear to be most at risk in the immediate future since they compete head on with China in lower-end manufacturing and are in danger of being ‘leapfrogged’ in the value-added chain. The more advanced NIEs are in a better position since they have time to increase value-added before China catches up and may benefit more from the opportunities China offers in terms of production and service complementarities.