Japan’s dominance of Asia’s high-tech exports has been brought to an end by China, according to the Asian Development Bank.
China’s share of Asia’s high-tech goods exports like medical instruments, and telecommunications and aircraft equipment increased to 43.7% in 2014 from 9.4% in 2000, according to the Asian Development Bank. Japan’s share dropped to 7.7% last year from 25.5% in 2000. Southeast Asian countries including Philippines and Malaysia also lost market share.
The change marks China’s victory in boosting technology and innovation as primary drivers of its economy and looks to move up the manufacturing value chain. In 2014, low-tech products accounted for 28% of China’s exports, compared with 41% in 2000, according to the Asian Development Bank’s Asian Economic Integration Report released Tuesday.
Co-head of Asian economic research at HSBC Holiding Plc in Hong Kong, Frederic Neumann, stated that China has made inroads in taking increasingly more high-tech manufacturing onshore even as several vital components remain imported from other nations. He added that it is becoming increasingly competitive, with highly skilled labor and they are observing more research and development coming into China.
Smartphones, China-made drones and even high-speed trains have become globally competitive and the total of enterprises in the high-tech manufacturing sector has tripled from less than 10,000 in 2000 to almost 30,000, according to ADB chief economist, Shang-Jin Wei.
He stated that they are observing some signs of success in certain industries, but China is still not an international technology leader like Germany or the United States. What they are observing is that China is quickly catching up on the ‘standard technology’ goods and is starting to do some innovations of its own.
China is also first in exports of low-tech products such as food, beverages, textiles, wood and paper and pulp products. In 2014 it had a 55.4% market share, followed by India with 9.4%.