Asian Leadership in Trade and Associated Risks - posted 23 Jan 2006
A Summit for the Future on Risk report by Evalueserve & Club of Amsterdam
World Trade: Emergence of Asia
See also Summit for the Future website at
Asia’s journey from the 1997-98 financial crisis to
being one of the world’s most dynamic regions in terms of trade,
development and investment activity, can best be termed as a
’Renaissance’. The world’s centre of economic gravity is shifting
towards Asia, as it currently accounts for 27 percent of international
trade. This growth is mainly driven by the exemplary performance of the
emerging Asian countries, including China, India, Hong Kong, Thailand,
Malaysia, Singapore and Vietnam. The share of these emerging Asian
countries in world trade increased from 13 percent in 1990 to 20
percent in 2004.
The Asian region is gaining significance in merchandise
as well as commercial services trade. Asia’s share in world merchandise
exports and imports stands at 26.8 percent and 24 percent,
respectively. The value of Asia’s merchandise exports and imports shot
up by 25 percent and 27 percent, respectively, in 2004. The growth in
exports from the region can be attributed to strong demand from the US,
and intra-Asian trade, stoked by a recovery in electronics trade.
Exports of commercial services increased at a fast rate
of 27 percent in 2004, while imports were up 25 percent during the same
period. Asian countries, such as India, China and the Philippines, are
the most preferred destination today for outsourcing of business
services, such as transaction processing, customer care centers,
medical transcription, IT services and application development,
high-end analytical services, R&D services, etc. Other commercial
services, such as transportation services were strong in 2004, while
travel receipts recovered by 31 percent during the year from
exceptionally low levels in 2003 (due to the spread of SARS).
Intra-regional trade as a share of total trade went up
sharply to 41 percent in 2004, primarily due to intra-industry trade as
a result of greater vertical specialisation and relocation of
production processes. This is evident in the electronics sector, where
capital intensive processes (like production of microchips) are carried
out in high-income economies like Singapore and Korea, and labour
intensive processes (like assembly of personal computers) are located
in low income countries, such as China. Asia has integrated into a
global production chain with some cities like Hong Kong and Singapore
becoming the hub of manufacturing and trade.
The dynamics of growth and development in Asia is a
perfect illustration of how countries have used trade as a means of
achieving greater degree of integration with the international economy.
Region-specific factors have provided the stimulus for this growth.
Download the full report at http://www.clubofamsterdam.com/content.asp?contentid=560