during the 1950s. Japan's X/S ratio is high and M/D ratio is about zero in 1965, indicating Japan's strong export competitiveness. However, after that, the X/S ratio steadily dropped and the M/D ratio continued to rise. This means that Japan began to lose its edge in both domestic and international markets to new exporting countries, such as the Asian NIEs and the ASEAN countries.

The X/S ratio in South Korea continued to rise after 1965, indicating Korea's improved export competitiveness. Although this ratio declined from 1972 to 1975, it had a steady increase afterwards. This means that cotton fabrics in the Asian NIEs did not reach the 'mature' stage.

In Thailand, the M/D ratio exceeded the X/S ratio until 1972, and in Indonesia, until 1979. This means that import substitution in ASEAN as a whole reached its full cycle and began to expand exports during the 1970s. Japan took a leading role in completing the import substitution of the ASEAN countries. Many Japanese textile firms changed their export increasing policies to production transfer through foreign direct investment. Table 5 shows that Japanese export toward the ASEAN countries steadily declined.

Meanwhile, in the United States, M/D ratio continued to rise and X/S ratio remained zero, thus indicating its 'reverse import' stage.

## Synthetic fabrics

Judging from table 6, the catching up by developing countries with developed countries had not been completed in synthetic fabrics during the 1970s. Tables 9 and 10 show, respectively, the export growth rate and the export share of synthetic fabrics in a similar way to that of tables 7 and 8.

The Asian NIEs, which had trade deficits in 1968, steadily increased their production and exports throughout the 1970s. As a result, the export share in Japan, the US and EC markets increased. Furthermore, the Asian NIEs' export to the US and EC increased markedly, in spite of the fact that between 1972 and 1977, macro economic factors, such as the shift to the floating exchange rate system and the recession which was caused by the Oil Crisis, depressed the import demand in the developed countries. The Asian NIEs' synthetic fabrics reached the level of competitiveness of the other exporting countries in the 1970s.

ASEAN, which showed very big trade deficits in 1968, increased production sharply during the 1970's. And its export steadily increased and trade deficits were gradually reduced. Although the export growth rate was extremely high, its share in the developed countries' markets was very small. This means that its competitiveness did not catch up with the level of the countries which had sufficient export competitiveness.

In Japan, the export surplus increased more rapidly than production through the 1960s to 1970s. Its export share in the US and EC markets and export growth rate also constantly kept a high level. This means that Japanese competitiveness increased in this period. Figure 5 shows exports from the US and EC increased on a large scale particularly toward the developed countries. Japan, the US and EC were net exporting countries and their relative status were still high, since developing countries did not catch up with them fully.

This changing structure can also be explained by the CPC theory, in the subsequent analysis.