Trade Reorientation and Its Effects on Regional Port Systems: The Korea‐China Link along the Yellow Sea Rim

ABSTRACT Owing to its competitive labor costs, its open‐market policy, and a substantial amount of capital investments, China has become a global manufacturing pole and an export‐based economy replicating the conventional Asian model but on a much wider scale. This is creating acute competition on other Asian export‐based economies such as Korea that have to adapt to the “China effect.” Consequently, many Korean manufacturing companies have repositioned their capital and equipment in China to enlarge their market potential as well as to reduce their production costs. Because Korea is adjacent to China—both are sharing the Yellow Sea Rim—this shift is creating a unique geographical dimension with a high level of functional integration of Sino‐Korean manufacturing supply chains. This transition has also brought substantial changes in the regional logistic network by organizing new flows of raw materials, parts, and final products, most of them along the Yellow Sea Rim. New logistic flows have given substantial influences on regional port competition by creating diverse links. These changes are bringing a reorientation of the regional maritime industry and of the port system.