relevant to future industrial development in the South Asian countries and even to such huge domestic market economies as China and India. It cannot be expected that the two big economies follow the CPC development. Their industrial development basically follows the growth of domestic consumption, relying much less on import substitution and exporting abroad. However, it does not imply that their industrial development should be separated from the competition outside. Their producers should be exposed more to competition with foreign products both at domestic and foreign market, and encouraged to improve their efficiency and become more competitive so as to be able to export their products abroad. Big economies may not follow the CPC but its core mechanism of catching-up is still relevant for them. (f.n.7)

## Cooperation for industrial adjustment

It was pointed out in the beginning of this paper that the flying wild-geese has become a popular catch phrase for the Pacific cooperation since Dr. Okita introduced the concept in his address to the 5th PECC General Meeting in 1985. (f.n.8) It is concerned with the policy implication of the CPC model but how it is related with theoretical and empirical analyses of the model in the previous sections?

There are various versions of this popular catch phrase. The most naive version is “fly together”, simply stressing the general need for closer cooperation in the Pacific. The Pacific Asian economies have already achieved high growth and factual integration but they need to cooperate in order to resolve trade frictions resulting from growth and integration.

More sophisticated versions refer the CPC model as a framework for coordination of industrial adjustment among the Pacific Asian countries. Since the CPC model envisages a continuous shifting of comparative advantage from advanced to less-advanced countries, a harmonious division of labor is achieved as the former vacate their niches in the production and export of industries at the mature phase to late-starting countries (ESCAP 1989 and Chen 1988). Lim (1990) applied the model to Korean-Chinese cooperation in Yellow Sea Rim.

Industrial adjustment or restructuring has been implemented independently by individual countries and there has been no international coordination conceived yet. However, the industrial adjustment of a country affects those of other countries through changes in trade in the Pacific where trade-oriented industrialization prevails. A harmony in industrial adjustment will be ensured when the adjustment efforts are coordinated among individual countries and not pursued independently. But how is the coordination made possible? Yamazawa (1988) compared the following three forms; (A) exchange of information, (B) soft coordination, and (C) hard coordination.

(A) may sound naive but it is the minimum prerequisite for any form of coordination. The manner of industrial adjustment varies from one country to another much more wildly than in the case of trade policy. We need to know what our trading partners aim and how they implement their industrial adjustment policies. Transparency of individual adjustment policies needs to be ensured.

If we can agree on a broad direction of changes in comparative advantage structure among countries at different stages of development as is envisaged by the CPC model, then we can proceed a step further to (B). We monitor each other's trade and industrial policies