| Amidst the backdrop of ever-deepening interdependence in
trade in the East Asian region, traditional division of labor
has transformed from vertical to horizontal specialization
within the region. In addition, we are witnessing a progress
of “sector-specific vertical specialization.” Although increased
economic interdependence between Japan, China and ASEAN has
been considered, trilateral cooperative relations have yet
to be examined.
With that in mind, our research committee will focus on mutual
relationships and dynamism between three parties, Japan- China-ASEAN
in 2006 for the second year in a row, highlighting the role
and potential of Japanese businesses to contribute to economic
dynamism in Asian region. For that end, we will examine sector-specific
characteristics of a range of industries including die and
mold manufacturing, IT, electronics, petrochemistry, textiles,
automobile, and identify characteristics of their regional
strategies, managerial styles and technological transfer and
| We identified several patterns in the involvement of industries
in each country to regional markets, or the relations between
industries in each country and China.
In electronics, we found that product-specific compartmentalization
and international division of production processes have been
In automobile sector, we could roughly divide the region
into Southeast Asia, China and India. In the former, partial
division of production processes in type-specific production
and complementary trade relations in auto parts production
could be observed. However, trilateral regional trade will
not be accelerated in the near term with the expansion
and growth of respective domestic markets.
In synthetic fiber and apparel sector, China has become
the sole winner in the region with shrinking export growth
in Southeast Asia and the downscaling Japanese textile
industry. With the steady growth of Indian textile business,
China and India will become undoubtedly two textile giants.
In information technology sector, India is expected to be
the regional leader in software development. However, it
may also contribute to lower labor cost and increase competitive
edge for Japanese financial institutions and service sectors
through their outsourcing activities. At the same time, China
may also strengthen its position in electronics by recruiting
Indian engineers or adopting their software development capabilities.
Given the circumstances, it is possible to conclude that
there are three keys to succeed regional cooperation and
the region-wide industry cooperation. First, active efforts
to solve common issues facing the region beyond the boundary
of industries are necessary. To that end, cooperative efforts
to design and develop institutional infrastructures are required.
Second, it is important to cooperate in developing human
resources at a regional level. Third, cooperation to build
an enabling framework to bring mutually beneficial and mutually
complementary system for the international specialization
is the key.
Our next step will be to examine the potential for each
sector and field and identify various challenges and solutions.
Further, we should focus on respective stakeholders including
governments, industry associations, and businesses, with
a view to explore future public-private partnerships.