East Asia's manufacturing industry, with its remarkable growth in recent years centering on China, South Korea and members of the Association of Southeast Asian Nations (ASEAN), has come to be called "the Factory of the World."
But a shadow of uncertainty is now looming over its future. At the Boao Forum for Asia conference held in early April on China's Hainan Island, this problem was taken up in one of its debate sessions, which I attended
Certainly the circumstances surrounding the manufacturing industry in East Asia are changing. In the first place, economic stagnation continues in its major export markets such as the United States and the European Union. Their economic slumps will likely persist for years due to the worsening of their fiscal structures and financial markets. Roughly sketched, the East Asian manufacturing industry consists of a network chain in which Japan, South Korea and Taiwan supply high-quality parts and semi-finished products, and China and ASEAN countries assemble them and export the final products to the U.S. and European markets. If their export business stagnates and this role-sharing structure collapses, the region's overall system for manufacturing will weaken.