1 / 15

Rafaelita M. Aldaba Philippine Institute for Development Studies

East Asia: A Decade After the Financial Crisis need for closer investment cooperation to increase competitiveness & sustain growth. Rafaelita M. Aldaba Philippine Institute for Development Studies. East Asian high economic growth led by China.

Download Presentation

Rafaelita M. Aldaba Philippine Institute for Development Studies

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. East Asia: A Decade After the Financial Crisisneed for closer investment cooperation to increase competitiveness & sustain growth Rafaelita M. Aldaba Philippine Institute for Development Studies

  2. East Asian high economic growth led by China • Strongest growth in the last 10 years after crisis: 8.1% • Developing countries: 9.5% • China: 10.7% has led the continued strong growth of the East Asian region Source: World Bank [2007] “East Asia & Pacific Update”

  3. East Asian Region richer as its per capita GDP continues to rise • Per capita income has continued to increase relative to incomes in OECD countries increasing from 14% in 1996 to 20% in 2006 • After the 1997-98 Asian financial crisis, the East Asian region is far richer Source: World Bank [2007] “East Asia & Pacific Update”

  4. High per capita GDP growth largely due to China • OECD average per capita income growth was 1.8% • Indonesia 3.5%, Malaysia 3.5%, Philippines 2.9%, & Thailand 4.6% • China: 8.9% has contributed substantially to strong performance of the East Asian region Source: World Bank [2007] “East Asia & Pacific Update”

  5. Growing trade integration between the region & the rest of the world • Export to GDP ratios increased in all major economies between 1995 & 2005 • Average exports increased from 34% of GDP in 1995 to 42% in 2005 • East Asian economies have continued to become more exposed to international trade over the last decade Source: World Bank [2007] “East Asia & Pacific Update”

  6. Rising East Asian exports as % of world exports • East Asia’s average share of world exports rose from 15.5% in 1995 to 17.9% in 2005 • A very large portion of the increase came from China & Hong Kong: 4.5% to 7.7% • World trade shares of Taiwan, Singapore, Thailand, Malaysia & Indonesia fell; Korea & Philippines increased slightly over the last decade Source: World Bank [2007] “East Asia & Pacific Update”

  7. Export shares of East Asia to the US computers, peripherals & semiconductors (CPS) market • The CPS is the largest sector of the US-East Asian trade • NIEs lost their market shares • ASEAN4 rose till 2001 but fell in 2001-2005 • China’s market share increased especially in 2001-2005 • Post crisis period 2001-2005: competitive pressure from China rose sharply Source: World Bank [2007] “East Asia & Pacific Update”

  8. China’s rapid growth provided a locomotive for trade in the region • In 2004, China’s imports from Korea & Philippines increased by more than 40% • Imports from Taiwan & Thailand increased by slightly more than 30% & 25% in Indonesia • Positive changes in China’s imports from these countries continued in 2005 & 2006 Source: World Bank [2007] “East Asia & Pacific Update”

  9. Rising intra-regional trade between China & HK and the major East Asian economies • The share of the major East Asian economies exports to China & HK increased from 13.3% in 1995 to 21.3% in 2005 • This surge reflects the rising intra-regional trade of China & HK & rest of East Asia • Exports of components & other inputs Source: World Bank [2007] “East Asia & Pacific Update”

  10. FDI & regional production networks • This intra-industry trade has been closely associated with FDI flows & the establishment of regional production networks • Both FDI flows & production networks are at the heart of the rapid increase in intra-regional trade in the region over the last decade since the crisis

  11. FDI trends • The East Asian countries continue to receive strong FDI inflows • FDI outflows also continue to grow quickly in the last 2-3 years as East Asian corporations implement their own cross-border investment & production strategies • These trends should alleviate concerns that the large volumes of FDI inflows to China would preclude significant flows to other parts of East Asia Source: Central Bank of the Philippines

  12. Philippine Electronics Exports: growing importance of China & Hong Kong Source: National Statistics Office

  13. Balance of Trade: Philippines Source: Central Bank of the Philippines

  14. Net FDI Inflows to Philippines (million US$) Source: Central Bank of the Philippines

  15. Broad Conclusions • emergence of China as an international trading power • expansion and structural changes in international trade → China as a major competitor → China as a new & dynamic market for these economies • New division of labor with production networks: China as a final integrator of products for exports & rapid rise in intra-regional trade in production inputs • FDI flows are closely associated with intraregional trade & production networks • The growing FDI flows from China & Asian NIEs offer an additional avenue for countries to link up to global markets & production systems • Intraregional flows can help increase market access, natural resources, foreign capital, & technology that are essential for increasing competitiveness esp. SMEs • Investment cooperation is crucial in order to maximize intraregional investment flows

More Related