The Sophistication of East Asian Exports

Author Name THORBECKE, Willem  (Senior Fellow, RIETI) /Hao-Kai PAI  (Research Assistant, RIETI)
Creation Date/NO. November 2013 13-E-092
Research Project East Asian Production Networks and Global Imbalances
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Hausmann, Hwang, and Rodrik (2007) found that countries that export more sophisticated products tend to subsequently grow more rapidly. We examine the sophistication of Asia's exports using Hausmann et al.'s and Kwan's (2002) measures. Japan remains the technology leader in Asia, but not in the world. In 2012, Japan's exports competed with those of South Korea and Taiwan and were complementary with those of China and the Association of Southeast Asian Nations (ASEAN). South Korea and Taiwan competed intensely with each other but less so with China and ASEAN, while ASEAN countries competed extensively with each other. Given the high levels of competition and cooperation among East Asian countries, greater exchange rate stability in the region would reduce export volatility among competitors and facilitate trade among comrades.