production was 124 million tons and its production/consumption ratio was on a decline for the past decade but still above unity, 1.24 in 1987. It goes without saying that crude steel production of the Asian developing countries are still small in comparison with the United States, Japan, and EC (Korea 17 million tons, Taiwan 5.6 million, Indonesia 1.5 million, and Thailand 0.38 million tons in 1987), but they are clearly on an increasing trend.

The catching-up has proceeded in other industries as well in the 1980s. Yamazawa, Hirata, and Yokota (1989) analyzed changes in export specialization patterns of the Asian NIEs and ASEAN countries based on RCA (revealed comparative advantage) indices calculated from trade data of 178 commodity groups at the SITC 3 digit level (f.n.6). They found that between 1980 and 1987 these countries increased their export specialization in SITC Section 6 (manufactured goods of leather, wood, textiles, metal, and non-metallic minerals) and Section 8 (footwear, clothing, and other miscellaneous manufactures) and a part of Section 7 (industrial, electric, and transport machinery), while Japan decreased its export specialization in Sections 6 and 8 and increased only in commodities of Section 7. Rava (1989) also conducted a rank correlation analysis of the RCA indexes of the Asian countries in 1965, 1973 and 1984 and found a significant changes occurred in the export specialization structure of the Asian NIEs and ASEAN countries alone.

The catching-up proceeds in machinery as well. Table 1 gives another evidence of the CPC development of the Asian Countries. It summarizes a survey conducted by Nihon-Keizai Shinbun on how closely the Asian neighbours have caught up with Japan in individual commodity production, mainly of machinery. Japanese MNCs are requested to assess the degree of catching-up with Japan by top producers in seven Asian neighbour countries in individual commodity production according to the following six grades from left to right; (1) will catch up in ten years, (2) will catch up in six years, (3) will catch up in three years, (4) just caught up, (5) exceeded only in price, and (6) already exceeded. The first three roughly correspond to the introduction and import substitution phase, while the last three to the export phase.

There is observed a clear pattern of catching-up by these Asian countries with Japan. In many consumer goods Korea and Taiwan have already exceeded Japan in price at least. Singapore, Malaysia, and Thailand are now catching up, followed by China. On the other hand, in producer goods much slower catching-up is observed. Korea and Taiwan are now catching up with Japan, while other countries are far behind. This survey included subsidiaries of foreign MNCs, and the fact that Singapore and Thailand were reported at the top grade in ball bearing reflect competitiveness of the Japanese subsidiaries. Korea and Taiwan have relied on their indigenous firms, while subsidiaries of foreign MNCs have contributed more to the catching-up by the other Asian countries. However, those foreign subsidiaries are often followed by local firms and the emergence of local entrepreneurship, production skills, and marketing abilities should not be underrated as is often the case in the study of MNCs. The accumulation of local managerial resources is the core of the CPC development, and the wide-spread of the CPC development in the Asian countries should be regarded as self-sustaining industrial growth in the Pacific Asian region.