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Abstract: On the basis of competency-based comparative advantage theory and reclassification of industries, this paper has discussed whether the FGP-type industry upgrade has taken place across different regions of China and whether China is able to transcend the middle-income trap through the FGP-type industry upgrade. This paper has discovered that no matter by traditional method of industry classification or the new method of industry classification, China has already experienced the FGP-type industry upgrade and entered into the second stage of this process. While relocating industries to central and western regions, China s eastern region does not have clear directions of industry upgrade of its own. Through analysis on the evolution of comparative advantages across regions, this paper has also discovered that in the process of the FGP industry upgrade, China is facing the risk of falling into comparative advantage trap. These factors are unfavorable to China s implementation of the FGP-type industry upgrade strategy, prevention of the comparative advantage interruptions that may confront middle-income countries and achievement of balanced regional development.
Keywords: The FGP-type industry upgrade, product space, comparative advantage
JEL Classification: 018, Oll, R58
(ProQuest: ... denotes formulae omitted.)
1. Introduction
After the Second World War, Asia's economy experienced a strong momentum of rapid development, referred to by the World Bank as the "Asian miracle". The contrast between the Asian miracle and economic stagnation of Latin America during the same period of time aroused extensive discussions on the reasons behind Asia's success. The flying geese paradigm (FGP) developed by Japanese scholars as early as in the 1950s is one of the theoretical frameworks for the explanation of Asian miracle. Although the FGP was developed by Japanese scholars for the analysis of international industrial relocation and division of labor, and controversies still exist regarding whether the development of Japan or East Asia is consistent with the FGP (Ono Susumu, 2008, Akamatsu, K.1962, Kasahara, S.2004), industrial relocations from developed countries to developing countries or regions and industrial relocations from the more developed parts of a country to less developed parts of it are strategies that deserve in-depth research. In 2009, Cai Fang et al. applied the FGP to the analysis of China's interregional industrial relocation and upgrade (Cai Fang, Wang Dewen, Qu Wangyue, 2009);...