Are Production Networks Passé in East Asia? Not Yet

Abstract

Many people have a vague notion that the room for expanding international production networks is almost exhausted and that therefore international trade has slowed down since the recovery from the great trade collapse. This paper presents evidence against such a belief in the East Asian context by classifying finely disaggregated trade data based on the stages of the production process. The trade slowdown was attributed mainly to sluggishness of trade in primary goods and processed raw materials. In contrast, East Asian trade in manufactured parts and components and the assembled end-products within production networks continued to expand steadily.