Seventh Asian Studies Conference Japan
    Saturday, June 21-Sunday 22, 2003
    Ichigaya Campus of Sophia University



ASCJ Executive Committee
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Contact the organizers: Asian Studies Conference (ASCJ) c/o Institute of Asian Cultural Studies, International Christian University 3-10-2 Osawa, Mitaka-shi, Tokyo 181


Session 12
FDI in Asia: Elements of Cooperation or Competition?
Organizer/Chair: Louis Augustin-Jean, Waseda University

This panel seeks to explain the role played by FDI (foreign direct investment) as a motor of cooperation and/or competition in Asia. This theme can be treated through two angles (not exclusive to each other). First, FDI can be used by countries or regions to cooperate or to compete with each other. It is worth noting that the governments interested in the constitution of the growth triangle of Johore/Riau/Singapore were trying to attract FDIs, while the government of Hong Kong (under the British rule) were not so keen to collaborate with the authorities of Guangdong. After this institutional approach, it is possible to consider the enterprises' point of view. In this respect, enterprises compete with each other in their industries. At a first glance, they seem to compete for (rare) resources, such as cheap labor. Nevertheless, it can be seen that some zones attract enterprises of one sector, and in this way, each enterprise can benefit from externalities. For example, it is well known that in China, some rural districts are specializing in one kind of production. Therefore, voluntarily or not, this phenomenon can add an element of cooperation to the competition level. Finally, the cooperation can be stronger, when several enterprises can decide to join together in order to access the market of a specific country. More generally, this panel seeks to understand the elements of competition and cooperation for FDI, whether at the institutional or enterprise level.

1) Anne Androuais, University of Paris X. "Japanese FDI and the Cooperation / Competition Process in the Asian Trans-boundaries Economic Zones"

A new productive way by innovation is currently taking place in Asia. This innovation process is due to cooperation and competitive processes between sector-based dynamics of the Japanese FDI in Asian trans-boundaries economic zones. This could lead to the creation of an economic triangular integration area between Japan, ASEAN countries and China, thus leading to a new form of regional integration. This paper will consider:

1) Co-operation effects and sector-based dynamics by Japanese FDI
The co-operation process is already well advanced and has now to answer the demands of immediate partners: Japan and ASEAN countries, especially with regard to resources reallocation and to the intensification of FDI in China. With the setup of economic and technological zones, the logic of the trans-boundaries experience is to allow the cooperation effects to play, due to labour and more extensive capital mobility between territories. These territories provoke economic dynamics in attracting FDI, enabling technological transfers and thus the diffusion of sector-based relations in reducing transaction costs. Then, local authorities can decide whether to continue to develop a dynamic borderless industrialised area. This industrialised area can increase complementary relations in creating a favourable environment for more accurate implementation of the FDI.

2) Competitive change in productive innovation and the setup of an economic triangular relationship between Japan, ASEAN and China
The question regarding the links between market, competition and innovation in Asia relates to the study of innovation. This increases the competitive position of enterprises established in trans-border technological poles or industrial technological parks, thus forming an intermediary stage of development with regard to inter-regional co-operation. This statement relies on the stimulation of the innovation process, producing a diffusion effect in the prevalent technological poles in the region, where industries are attracted towards higher levels of technology. Technological waves have caused reductions in production costs, from textiles to electronics and automobile industries; moreover, externalities have appeared, creating a spillover effect. Furthermore, FDI and joint ventures are quickly moving towards new competitive economic relations in the region. From the northern economic zone to the Southeast Asian countries, especially after the 1997 crisis, the continuing dynamic of techno-industrial restructuring in the region has given birth to a system of economic relations between Japan, ASEAN Countries and China, leading to a new form of regional integration.

2) Doryane Kermel-Torrès, Institut de Recherches pour le Developpement, Bordeaux. "Foreign Direct Investment in Thailand and Public Incentives: Spatial Organization and Enterprise Responses"

For almost two decades, Thailand has attracted a huge amount of investment, especially from Japan and the NIEs. A spatial policy of investment promotion has been set up according to state declared objectives to promote a social and spatial balance. The objectives were more complex: some were directly related to strengthening competitiveness on the international markets by offering investors the opportunity to fully exploit supposed regional comparative advantages. One section of the paper will analyze the imbalances generated by the conflicts between the general economic aim and the sectoral policy, and by the cooperation between the public and private capital to provide infrastructure and services for foreign investment. The paper will explore aspects of regional development planning that strengthen competition for foreign investment between central and peripheral regions. It will look at the reasons why the decentralization process hardly involves the devolution of power in attracting investment. Another section of the paper will analyze enterprise responses to sectoral and spatial incentives: the size of enterprise and amount of investment appear as key factors that have long influenced the collaboration between public agencies and enterprises. Competition between enterprises will be put forward as elements that concern access to infrastructure, services and labor. Attention will be paid to their impact on the internal organization of work and the geographical segmentation of production. Collaboration between enterprises will be analyzed mostly in the context of sub-contracting.

3) Francois Gipouloux, Centre National de la Recherche Scientifique, Centre Chine. "Determinants in Foreign Direct Investment's Uneven Distribution in China: A Comparative Study of Three Macro-regions -- East, Centre and West"

The split between the three regions of China (coastal, inland, and western) has accentuated over the last two decades as far as foreign direct investment (FDI) absorption is concerned. While the GDP of a given province, its infrastructure development, the level of education of its population and its access to a port have often been underlined as determining factors in China's uneven absorption of FDI, other institutional factors such as ownership regime have been neglected. This paper will focus on the attractive effects of a differentiated industrial ownership structure, analysed province by province, on the inflows of FDI. It will also assess the future evolution of the gap between China's macro-regions with regard to FDI

4) Bertrand Maximin, University of Paris V. "Foreign Direct Investment, Wage Inequalities, and Development in Asia"

East Asia and southeast Asia, reinforced by China, represent a privileged sphere for foreign direct investment (FDI).The salary gaps between the investing country and the host country seem to be one determinant in the relocation of multinational firms. Nevertheless, my attention will focus above all on the wage gap between killed and unskilled labour, insofar as it conditions the employment rate and the future well-being of these populations. My purpose is to show, first, that the recent redeployment of FDI among these countries has produced an increase in relative wages. Then the strategies of firms coming from the investing countries confirm the relevance of these conclusions. On the other hand, the global running of the host economies must be taken into account. The results obtained for South Korea and Singapore are compared to those for ASEAN member countries such as Thailand, Malaysia and Indonesia. This analysis allows a better assessment of the local adaptation policies of production structures and other factors in protecting the industrial dynamics and future welfare of these populations. FDI seems eventually to be more a complementary factor than a substitution factor in this economic dynamic.

The organizer/chair, Louis Augustin-Jean, will only present his paper in case of a defection:
"Delocalisation of Hong Kong Firms in China and Urban Planning in the Territory in the 90s: Was the Hong Kong Government Really Supporting the Expansion of Hong Kong Firms in South China?"

This paper seeks to analyse the behavior of the Hong Kong government during the delocalisation of local firms in South China. While these delocalisations implied a more integrated zone between Hong Kong and the Pearl River Delta and while the Guangdong authorities were keen to attract FDIs from the territories, how did the Hong Kong government respond to these market forces? The paper tries to give an answer by analysing the policy of the Hong Kong government in terms of urban planning and of infrastructures investment, especially concerning transportation (airport, road construction and port infrastructure). The answer seems to be that the Hong Kong government, while trying to develop the territory's economy, was not ready to increase the links between the two entities.


list of panels