The Impact of COVID-19 and the USChina Confrontation on East Asian Production Networks

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1 Citation (Scopus)

Abstract

International production networks (IPNs) in East Asia are facing two challenges, i.e., COVID-19 and the US-China confrontation. COVID-19 has generated three kinds of shocks on IPNs: negative supply shocks, positive demand shocks, and negative demand shocks. IPNs have adequately managed these shocks thus far and have been strengthening the relative position of Factory Asia in the world. Nevertheless, the US-China confrontation and its consequences of weakening the rule-based trading regime have enhanced uncertainties in the operations of IPNs. The decoupling pressure may come from either the US or China for middle powers in-between, even with the US Biden Administration. This study posits that the construction of a mega-free trade agreement (FTA) network may partially reduce policy risks and help form a pro-trade middle-power coalition.

Original languageEnglish
Pages (from-to)27-41
Number of pages15
JournalSeoul Journal of Economics
Volume34
Issue number1
DOIs
Publication statusPublished - 2021

Keywords

  • COVID-19
  • East Asia
  • international production networks
  • mega-FTAs
  • the US-China trade war

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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