China's rampant economic growth has been a boon for exporters in Japan, South Korea and Taiwan, who have supplied high-end components and machines for its factories. The risk for them now is that China will switch from customer to competitor as it ascends the value chain.
Japanese shipments to China reached a record $130 billion (about ¥13.65 trillion) in 2017, leading an export-driven economic recovery that's run for eight quarters straight. Korean sales to its neighbor have jumped 70 percent in a decade, while Taiwanese sales have climbed to an all-time high.
Yet a deeper dive into the data highlights the threat. Take the trade in semiconductors — and the machines that make these chips. Sales of the components from firms like South Korean tech giant SK Hynix Inc. have helped drive export growth to China from the rest of North Asia.
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