TNAG-2597-FCO40-3785-Appointment-of-Chris-Patten-as-new-Governor-of-Hong-Kong--Ap-1992 — Page 31

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Japanese automobile manufacturers. As a Japanese investor establishes subsidiaries in

different host countries within the region, the subsidiary in individual countries is meant

to specialize in the production of certain automobile part (or parts) to be used by the

subsidiaries in other countries. This strategy, called the BBC (Brand to Brand

Complementation) was initiated by Thailand in 1987 and approved at

economic ministers conference in 1988. The system is designed to attain large-scale

production of automobiles via "specialization" and "sharing" across countries.

an ASEAN ·

The flow of FDI from the ANIES to the ASEAN countries may have generated

backlash on the former, via the so-called "Boomerang Effect". As the production

structure of the host country is upgraded via the help of FDI, the host country may

threaten the home country by exporting commodities which the latter used to specialize

in. A case in point is that China is now exporting quality computer software to Taiwan

(and to Southeast Asian countries). Also, with the assistance of Japanese engineers,

the technology level of some Thai and Malay factories has been uplifted to an

international level. Today, Malaysia is one of the world's leading exporters of

semiconductors, air conditioners and colour televisions, and some of these merchandises

are able to compete successfully in the Japanese market. The extent of the "Boomerang

Effect" on the ANIES is difficult to gauge. Table 5 shows the import structure of the

ANIES from China and the ASEAN region. The imports from China mainly concentrate

in textile yarn and fabrics, telecommunications and sound recording and reproducing

equipment, and clothings (SITC 65, 76 and 84); whereas the imports from the ASEAN-4

mainly concentrate in cork and wood manufactures, textile yarn and fabrics, electrical

machinery and parts, and road vehicles and parts (SITC 63, 65, 77 and 78).

Nevertheless, in the present con text, the "Boomerang Effect" backfired on Japan and

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