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V. ANALYSIS OF THE COMPLEMENTARITY
- ISEAS–Yusof Ishak Institute
- Chapter
- Additional Information
Analysis of the Complementarity 35 V ANALYSIS OF THE COMPLEMENTARITY Though competition between China and ASEAN-5 in market expansion in the third country exists, their trade relationship has developed rapidly all these years, which is closely linked to their economic complementarity. 5.1 Complementarity in the Endowment of Natural Resources There is inherent certainty in the fast development of bilateral trade between China and ASEAN, and this is linked to the fact that both sides have their own strong areas in the endowment of natural resources. Concerning the commodity structure of the bilateral trade in 2003 (Table 3.3), the share of the resource-based commodities category accounted for 22.24 per cent. From Appendix 2, we can see that crude rubber (including synthetic and reclaimed), cork and wood, petroleum products and related materials, and fixed vegetable fats and oils are among China’s top ten commodities imported from ASEAN-10 under the SITC 2-digit level in 2003. These commodities accounted for 2.54 per cent, 2.14 per cent, 10.83 per cent and 3.35 per cent of China’s total imports from ASEAN-10 respectively. But if we look at the bilateral trade between China and ASEAN individual countries, we can see that besides the products mentioned above, cereals and cereal preparations is one of China’s top ten export commodities to Indonesia, Malaysia and the Philippines, and vegetables and fruit 05 China-ASEAN TR 7/12/05, 12:04 PM 35 36 China-ASEAN Trade Relations is among China’s top ten export commodities to Malaysia and Brunei. It is obvious that there exists complementarity in the endowment of natural resources between the two sides, such as tropical resources in Southeast Asia — palm oil, natural rubber and timber resource, and crops and fruits of temperate zone in China — maize, oil cake from rape, colza seeds, pear and apple. In addition, tropical fruit and vegetable products such as Philippine banana, coconut and pineapple, Thai civet durian and tapioca and its products, Vietnamese guava and Laotian locus beans are products that China imports in large quantities, while Chinese cereals, vegetables, and mineral products such as zinc, lead, etc. are what ASEAN countries need. Actually China is an important importer for primary products from Southeast Asian nations. In 2002, China was the biggest importer of Indonesian chemical wood pulp (HS 4703), paper and paperboard (HS 4810), Philippine refined copper (HS 7403), Malaysian palm oil and its fraction (HS 1511), animal or vegetable fats and oils (HS 1516), and natural rubber (HS 4001), Vietnamese natural rubber, Laotian locus beans (HS 1212) and natural rubber, Cambodian live fish (HS 0301), veneer sheets and sheets for plywood and other wood sawn lengthwise (HS 4408) and plywood, veneered panels and similar laminated wood (HS 4412), and Myanmar’s dried fruit (HS 0813) and wood sawn/chipped lengthwise (HS 4407). China was the second largest export market for Philippine bananas and plantains (HS 0803) and petroleum oils (not crude, HS2710), Vietnamese coal and solid fuels manufactured from coal (HS 2701) and crude petroleum oils (HS 2709), Laotian medicinal plants (HS 1211), wood in the rough (HS 4403) and wood sawn/chipped lengthwise, Cambodian crustaceans (HS 0306), natural rubber and wood sawn/chipped lengthwise, 05 China-ASEAN TR 7/12/05, 12:04 PM 36 [18.233.223.189] Project MUSE (2024-03-29 02:08 GMT) Analysis of the Complementarity 37 and Myanmar’s wood in the rough.28 With rapid economic development, China’s import demand for raw materials will grow bigger, so there is great potential in bilateral trade cooperation in this aspect between ASEAN and China. 5.2 Complementary Comparative Advantage of Manufactured Goods Though manufactured goods are the main export products of ASEAN-5 and China, the comparative advantages of both sides are different to some extent. If we look at the value added of the manufactured goods exported to the United States in 2000 (Figure 5.1), we can find that China’s value added was lower than that of ASEAN-5, which means the level of advancement of the export structure of China still lagged behind those of ASEAN-5 (Kwan 2002). China’s position in the value chain is lower than ASEAN-5 members in the manufacturing industry. As far as the categories of manufactured goods are concerned, there also exist some complementarities between China and ASEAN-5. From Appendix 4, we can see that China has comparative advantage in inorganic chemicals while Indonesia, Malaysia...