substantially to the intermediate goods trade sector, garments for example. As the majority of garment factories are cut-make-trim (CMT), most materials are from abroad, where most garment products are also exported to original companies.
Since trade in the Lao PDR has not been categorized with this term, it is very difficult to measure intermediate goods trade in the country. This is due to its statistical system not been completely applied to the Harmonized System (HS) nor to Standard International Trade Classification (SITC). Therefore, this paper defines intermediate goods trade in terms of broad economic categories involving semi-finished goods and parts and components. Moreover, as it is difficult to cover the whole picture of intermediate goods trade for the Lao PDR due to the current domestic statistical system, the paper selected two case studies in the garment and motorcycle sectors to analyze the situation, as these are sectors that best fit the case of the Lao PDR.
This paper will review the industrial development process of the country and its intermediate goods trade development. It will also observe the roles of China, Japan and the Republic of Korea in the development of the Lao PDR’s intermediate goods trade. The paper is divided into three main parts: Part one reviews the industrialization of the country. Part two shows the characteristics of intermediate goods trade development of the country. Part three compares China, Japan and Korea regarding intermediate goods trade with the Lao PDR through two case studies in the garment and motorcycle sectors. The paper ends with a conclusion and policy recommendations.