Asia-Pacific 'too dependent on exports'
Trade and investment growth is slow in the Asia-Pacific region because of an over-dependence on foreign demand for its exports, according to a United Nations report.
Published: 24/09/2014 at 04:06 PM
Newspaper section: breakingnews
While the Asia-Pacific region remains the most dynamic pole of the global economy, growth in trade and investment flow is yet to return to the strong levels prior to the global financial crisis, a new report by the UN Economic and Social Commission for Asia and the Pacific (Escap) released in Bangkok on Wednesday concluded.
According to the Asia-Pacific Trade and Investment Report 2014, total exports and imports from the region grew by only 2% in 2013 and were weak in the first half of 2014. Growth in 2015 is expected to increase to 7%, but whether it is achievable or not depends on global macro-economic prospects.
"The overarching message of this year’s report is that the lengthy shadows cast by the crisis highlight the need for economic rebalancing,” said Escap executive secretary Shamshad Akhtar.
“In part, this requires refocusing on domestic value addition of exports, rather than increasing gross exports alone,” she said.
“Regional economies also need to diversify away from dependence on traditional sources of export-demand in Europe and the United States, developing domestic demand and better integrating with other regional economies,” Ms Akhtar said.
The report shows consolidated intra-regional trade, with more than half of regional exports now directed to other Asia-Pacific countries.
Amongst the report’s findings, Northeast Asia alone was responsible for about 60% of both total regional merchandise exports and imports in 2013.
Similarly, 65% of all services exports from the Asia-Pacific region are attributable to just six economies: China, India, Japan, Korea, Singapore and Hong Kong, China.
This suggests that large gaps remain between countries in terms of their trade competitiveness and level of diversification, and that great potential remains still untapped, especially in the services sectors of many countries, according to the report.
Asia-Pacific attracted US$549 billion of foreign direct investment (FDI) in 2013, a rise of 6.6%, accounting for almost 38% of global inflows. However, this was still lower than the global increase and lagged behind other fast-growing regions such as Latin America.
On a more positive note, the report indicates a noticeable diversification in the destination of FDI within the region - with new locations and smaller players now attracting more foreign investors, and on a larger scale.
Intraregional FDI is also found to be expanding in importance, with inflows through mergers and acquisitions totalling more than $153 billion, accounting for almost one-third of total regional FDI inflows last year, and also flowing to a diverse range of destinations.
According to Esap, given the importance of foreign investment in transferring technology and generating jobs, this is a promising development and augurs well for deepening global value chains, stimulating higher returns and generating decent jobs.
Asia-Pacific 'too dependent on exports'
Trade and investment growth is slow in the Asia-Pacific region because of an over-dependence on foreign demand for its exports, according to a United Nations report.
Published: 24/09/2014 at 04:06 PM
Newspaper section: breakingnews
While the Asia-Pacific region remains the most dynamic pole of the global economy, growth in trade and investment flow is yet to return to the strong levels prior to the global financial crisis, a new report by the UN Economic and Social Commission for Asia and the Pacific (Escap) released in Bangkok on Wednesday concluded.
According to the Asia-Pacific Trade and Investment Report 2014, total exports and imports from the region grew by only 2% in 2013 and were weak in the first half of 2014. Growth in 2015 is expected to increase to 7%, but whether it is achievable or not depends on global macro-economic prospects.
"The overarching message of this year’s report is that the lengthy shadows cast by the crisis highlight the need for economic rebalancing,” said Escap executive secretary Shamshad Akhtar.
“In part, this requires refocusing on domestic value addition of exports, rather than increasing gross exports alone,” she said.
“Regional economies also need to diversify away from dependence on traditional sources of export-demand in Europe and the United States, developing domestic demand and better integrating with other regional economies,” Ms Akhtar said.
The report shows consolidated intra-regional trade, with more than half of regional exports now directed to other Asia-Pacific countries.
Amongst the report’s findings, Northeast Asia alone was responsible for about 60% of both total regional merchandise exports and imports in 2013.
Similarly, 65% of all services exports from the Asia-Pacific region are attributable to just six economies: China, India, Japan, Korea, Singapore and Hong Kong, China.
This suggests that large gaps remain between countries in terms of their trade competitiveness and level of diversification, and that great potential remains still untapped, especially in the services sectors of many countries, according to the report.
Asia-Pacific attracted US$549 billion of foreign direct investment (FDI) in 2013, a rise of 6.6%, accounting for almost 38% of global inflows. However, this was still lower than the global increase and lagged behind other fast-growing regions such as Latin America.
On a more positive note, the report indicates a noticeable diversification in the destination of FDI within the region - with new locations and smaller players now attracting more foreign investors, and on a larger scale.
Intraregional FDI is also found to be expanding in importance, with inflows through mergers and acquisitions totalling more than $153 billion, accounting for almost one-third of total regional FDI inflows last year, and also flowing to a diverse range of destinations.
According to Esap, given the importance of foreign investment in transferring technology and generating jobs, this is a promising development and augurs well for deepening global value chains, stimulating higher returns and generating decent jobs.
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