What Are the Opportunities and Challenges for ASEAN?

This paper attempts to investigate the features of development and restructuring patterns of regional production/distribution networks, mainly in machinery sectors, using finely disaggregated international trade data. More specifically, the paper first studies the developing patterns of machinery trade for the East Asian countries, then examines those patterns in terms of the extensive margin in order to investigate the extent and depth of the networks, and demonstrate how the networks and industrial shape are being restructured. The paper also presents some evidences on the expanding connectivity of production networks in East Asia from regional to global by shedding lights on the link between East Asia and Europe via CEE countries and concludes with policy implications on challenges in taking advantages of the mechanics of the 2nd unbundling for each ASEAN member state and ASEAN as a whole.