East Asian Production Networks and Global Imbalances

This project investigates production networks in East Asia. The region is characterized by intricate production and distribution networks. Skilled workers in Japan, Taiwan, South Korea, and other places produce sophisticated, technology-intensive parts and components and ship them to China and ASEAN for assembly by lower wage workers and for re-export largely outside of Asia. Exports from East Asia have been accompanied by large imbalances with the rest of the world. This project investigates how East Asian production networksare evolving, especially in light of the many shocks such as the floods in Thailand, the earthquake in Japan, the Global financial crisis, and the strong yen. It also considers whether the associated imbalances are sustainable, and how more of the final goods can be channeled to Asian consumers. In addition, it investigates the effects of exchange rate changes on trade. It is hoped that the findings will have policy implications. There is currently little discussion between East Asian policy makers on exchange rate issues, in contrast with the intensive private sector integration occurring within regional production networks.

December 27, 2011 - October 1, 2013