Production Networks in China and India: A Comparative Analysis

Economic Change and Restructuring, March 2013, Volume 46, Issue 1, pp 45-69

Posted: 23 Oct 2014

See all articles by K. C. Fung

K. C. Fung

University of California at Santa Cruz

Hsiang-Chih Hwang

Lingnan University - Department of Economics

Francis Ng

World Bank - Headquarters - Washington DC

Jesús Seade

Sun Yat-Sen University (SYSU) - Department of Economics

Date Written: December 1, 2012

Abstract

In this paper, we examine and compare the two important production hubs in Asia: China and Greater China and India and South Asia. We show that in China, Hong Kong and Taiwan, manufacturing trade has continued to be highly relevant, with trade in parts and components growing in importance. In contrast, in India, Pakistan and Sri Lanka, trade in parts and components remain limited. We then calculate various revealed comparative advantage (RCA) indices, which China having more components with RCA values exceeding one. Some of the most important components exported by China include electronic parts and telecommunication parts. One explanation is to why India is relatively weak in parts and components trade is that India is strong in service trade. Other reasons may be related to better port infrastructure, higher research and development intensity and higher educational enrollments in China.

Keywords: International Trade, China, Greater China, India, South Asia, Production Networks

Suggested Citation

Fung, K.C. and Hwang, Hsiang-Chih and Ng, Francis and Seade, Jesús, Production Networks in China and India: A Comparative Analysis (December 1, 2012). Economic Change and Restructuring, March 2013, Volume 46, Issue 1, pp 45-69, Available at SSRN: https://ssrn.com/abstract=2230190

K.C. Fung

University of California at Santa Cruz ( email )

Santa Cruz, CA 95064
United States
831-459-3273 (Phone)
831-459-5900 (Fax)

Hsiang-Chih Hwang (Contact Author)

Lingnan University - Department of Economics ( email )

8 Castle Peak Road
Tuen Mun
Hong Kong
+852-2616-7181 (Phone)
+852-2891-7940 (Fax)

Francis Ng

World Bank - Headquarters - Washington DC ( email )

1818 H Street, NW
Washington, DC 20433
United States

Jesús Seade

Sun Yat-Sen University (SYSU) - Department of Economics ( email )

Hong Kong
China

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