International Production Networks in Asia: Rivalry or Riches by Michael Borrus, Dieter Ernst, Stephan Haggard

By Michael Borrus, Dieter Ernst, Stephan Haggard

The commercial situation of 1997 known as East Asia's fiscal miracle into query and generated frequent feedback of the region's developmental types. besides the fact that, the hindrance did little to change the turning out to be financial integration of yankee, eastern and chinese language organizations who've created cross-border creation networks. This publication addresses the altering nature of high-tech industries in Asia, really within the electronics quarter, the place such networks are more and more designed to foster and to take advantage of the region's hugely heterogenous know-how, talents and knowledge.

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In addition, the Asian financial crisis has highlighted the fact that these networks flourished in the context of relative macroeconomic and exchange rate stability. Only time will tell whether they can flourish under conditions of financial market volatility. INTRODUCTION 23 Finally, the new CPNs also influence the key trans-Pacific relationships between the United States, China, and Japan. Because of its size, Beijing believes it can exploit its large market to pursue an industrial strategy based on protection, restrictions on investment, forced technology transfer, and the creation of large industrial groups.

The American firms that pursued this strategy concentrated almost entirely on product definition, development, and marketing. The very management of complex supply chains had itself become a core competence, and some firms, such as Compaq, even specialized in it. Production intermediaries such as Solectron built lucrative businesses by developing their own CPNs, packaging Asian supply capabilities with their own skills and providing full-service turnkey manufacturing capabilities to MNC customers.

A systemic analysis of how the Asian crisis is likely to affect the upgrading requirements of Asia’s electronics industries can be found in Ernst (1998a,b; 2000). For additional evidence that is based on a more disaggregated analysis, see Ernst andGuerrieri (1998). For example, market analysts estimate that Cisco products account for approximately half of the router market in Asia. html. On these relationships, see Gereffi and Korzeniewicz (1994). Gereffi and Korzeniewicz, ibid. In this industry, fabric is produced, often in highly automated plants, in one place; cut and processed in another, and stitched and assembled and finished in still others.

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