Reorganization of Intra-ASEAN 5 Trade Flows: The ‘China Factor’*

There are claims that China's influence on ASEAN is direct in that she has encouraged more exports to flow into her huge markets and changed trade flows among member countries. Demand and supply are thus deemed to have become more China-centered. This study therefore explores the plausibility of China as a ‘factor’ that influences bilateral intra-ASEAN 5 trade flows through demand (exporting country) and supply (importing country). The results imply that China's integration in the region increases the size of the key ASEAN member economies export market. There is also no indication that import sourcing from China by ASEAN 5 countries reduces export expansion within the latter. The results accord with the fact that although China has become an important export destination and an import source for individual ASEAN 5 countries, this has not reduced intra-ASEAN 5 trade.