CHINA & ITS NEIGHBOURS

IN 2005
LT 01
Section A
Problem: Rising dominance of China in
Asian economy

Causes:
 Neighbors losing FDI to China
 Competitive advantage of labor (cost & law) in China
salvaging the ‘export processing’ industry of its neighbors

Parties Affected:
 South-east Asian countries
Alternatives

 Reduce dependency on China – Develop new markets

 Improve competitive advantage

 Incentivize local players to invest in local market

Recommendation

 Improve competitive advantage

 Invest in improving labor skills
 Invest in competitive advantage sectors
 Technology – North Asian (Japan, Korea, Taiwan)
 Raw material – South Asian (ASEAN)
 Services – Mega cities (HK, Singapore)