China is emerging as a leading Pacific economy in the 1990s. This paper examines the implications of China's entry into the world market for the OECD countries as well as for the regional economies of Asia and the Pacific. It argues that the shares of Asian countries in the OECD countries' market cannot increase without bound, as China and its neighbouring developing economies have basically similar export profiles, competing with each other for market shares for similar products.

China's coastal strategy has led to the emergence of a "greater China", encompassing China, Hong Kong and Taiwan. Growing trade and investment flows between China and Taiwan via Hong Kong since the mid-1980s can be understood as components of "catching-up" processes, described by some trade economists as the "flying-geese" pattern of trade development.

In short, China's entry into the world market is a "positive sum" game, as it provides new market opportunities for both OECD countries and Asian NIEs. In ...