Earlier this week, economists, policymakers, and business leaders from across the Asia-Pacific region gathered in Bangkok for the UNESCAP’s Trade and Investment Week. Participating in it gave a valuable insight into how economic growth is panning out across the region, and how stakeholders are adapting to a new post-2015 era of development priorities – the Sustainable Development Goals or SDGs.
Events included the 4th Asia Pacific Business Forum and the Committee on Trade and Investment, as well as two sessions which I spoke in – the Expert Group Meeting on Trade Policies, and the Regional Workshop on Science, Technology and Innovation. But a key highlight of the week for me was the launch of the Asia Pacific Trade and Investment Report 2015, which each year gives a helicopter view of the region’s economic health. Here are 10 key takeaways from this years report.
- Excluding China, exports from the region fell 0.4% in 2014. Both weak external demand plus structural issues are influencing this weak performance
- Imports into China is forecast to be less in 2015-16 (due to slowing production there), and will affect export-driven driven growth in the rest of Asia Pacific, particularly intermediate and commodity exports
- Imports by Russia fell 30% in 2014 in real terms, signalling the impact of the sanctions on the country, falling energy prices, and the collapse of the stock market and the ruble
- India’s growth uptick seen to be emerging is positive in its own right, but unlikely to be of great help to the wider region as it is only limitedly integrated with wider Asia Pacific economies, unlike China
- The growth in the services sector exports has been the singular positive story, with exports growing 5.1% last year. In fact, one third of services trade globally is in this region . But there is substantial concentration – China, Japan, Singapore and India account for half of all services exports.
- The region received half a trillion in FDI inflows, up 43% in 2014. In this, China was the largest recipient, about one-fifth.
- Trade facilitation and costs continue to be a key challenge. Evidence suggests that a 1% increase in level of TF implementation reduces costs by 2.3%. But there has been a continued rise of trade restrictive measures in this region, dominated by behind-the-border non-tariff measures
- Last year, countries around the world made 80 trade liberalizing measures, alongside 108 restrictive measures. Of this, Asia Pacific economies accounted for just 27% of liberalising measures, but 40% of restrictive measures; so the region doesn’t have a good report card on this.
- Global value chains (GVCs) have been at the heart of the regions dynamic trade growth. 90% of GVCs concentrated in just 10 Asian economies. 43% of global intermediate exports and 39% of global imports are from the region.
- We are seeing a lot of south-south trade – over 65% of GVC intermediate imports by countries in this region were sourced from each other, i.e., from within the region.
The full report is available online here – http://www.unescap.org/resources/asia-pacific-trade-and-investment-report-2015-supporting-participation-value-chains