Regional integration seen fending off uncertainty
Increasing regional integration and cooperation in trade and investment in the Asia-Pacific region has helped the region improve its economic resilience to uncertainty in the global economic and trade policy environment, said a report released on Wednesday.
The Asian Economic Integration Report 2017, released by the multilateral Asian Development Bank (ADB), pointed to strong intraregional trade and investment in 2016 as a sign of increased integration and cooperation among countries in the region.
"Strong intraregional trade and investment are acting as a buffer for the region against uncertainties in global trade and economic growth," the ADB said in a statement accompanying the release of the report.
The value of intraregional trade among countries in the Asia-Pacific region accounted for 57.3 percent of the total trade for the region in 2016, which is a record high and up from an average of 55.9 percent from 2010 to 2015, the report noted. Asia's trade grew 1.7 percent in 2016, faster than 1.4 percent in the previous year, while world trade growth slowed to 1.3 percent in the year from 2.6 percent in 2015, the report said.
In terms of investment, the total amount of foreign direct investment (FDI) within the Asia-Pacific region rose to 2 billion in 2016, on a backdrop of a 6 percent decline in global FDI flows into the region, according to the report. The share of intraregional FDI accounted for 55 percent of the region's total in 2016, up from 48 percent in 2015, it said.
Moreover, the report noted that Asian economies have continued to expand their global presence, with Asia-originated FDI rising 11 percent year-on-year to 2 billion in 2016.
"Asia and the Pacific is leading a recovery in world trade that is helping the region to maintain strong growth momentum amid global economic and trade policy uncertainty," Yasuyuki Sawada, the ADB's chief economist, was quoted as saying in the statement. "Asia's continued integration and cooperation will underpin regional economic growth and financial resilience."
With the report, the ADB also introduced a new composite index, the Asia-Pacific Regional Cooperation and Integration Index (ARCII), which measures regional integration in six areas: trade and investment, money and finance, regional value chains, infrastructure and connectivity, movement of people, as well as institutional and social integration.
The ARCII is at 0.448, which is below a reading of 0.617 for the EU but above the level in Africa and Latin America, according to the report.