Asian Economic Integration Report 2017

The Era of Financial Interconnectedness: How Can Asia Strengthen Financial Resilience?

The Asian Economic Integration Report 2017 is ADB’s annual report on Asia’s progress in regional cooperation and integration (RCI). It covers ADB’s 48 regional members and analyzes regional as well as global economic linkages. This year’s special theme chapter, “The Era of Financial Interconnectedness: How Can Asia Strengthen Financial Resilience?” reexamines the region’s ability to absorb financial shocks and avoid instability. The report also introduces an RCI composite index to help monitor and evaluate RCI progress in the region. The Asia-Pacific Regional Cooperation and Integration Index combines six RCI components: trade and investment, money and finance, regional value chains, infrastructure connectivity, movement of people, and institutional and social integration.

  • The newly-introduced Asia-Pacific Regional Cooperation and Integration Index (ARCII) allows Asian economies to track and monitor the progress of their regional integration efforts across six different socioeconomic dimensions.



  • Asia remains more financially linked to the rest of the world than to itself.



  • Amid a slowdown in total inward foreign direct investment to Asia, intraregional investment flows continue to rise.



  • Firms in Asia are bolstering their status as global investors.



  • A large part of intraregional FDI is greenfield investment, mainly in manufacturing, while M&As are more dominant for FDI going outside the region.





  • Asia’s intraregional trade continued to strengthen, providing a buffer against potential headwinds from global trade and policy uncertainties.




  • Tourism is growing rapidly in the region, both in terms of the number of tourists and the amount of tourism receipts.




  • Remittances to Asia declined in 2016, but its impact within the region was varied.




  • Twenty years after the Asian financial crisis, Asia stands strong—with more flexible exchange rates, higher foreign reserves, healthier financial systems, stronger regulations, deeper capital markets, and better regional financial cooperation mechanisms.




  • Growing financial interconnectedness can increase vulnerabilities to external shocks, financial contagion, or liquidity risks stemming from cross-border bank lending.




Contents:

Cover and Highlights

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Regional Outlook, Linkages, and Vulnerabilities

  • Regional Outlook, Integration, and Challenges
  • Transmission Mechanism
  • Emerging Vulnerabilities
  • Coping Mechanisms
  • Concluding Remarks
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Trade and the Global Value Chain

  • Recent Trends in Asia’s Trade
  • Asia’s Intraregional Trade
  • Progress of Global and Regional Value Chains
  • Updates on Regional Trade Policy
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Cross-border Investment

  • Trends and Patterns of FDI in Asia
  • Outward FDI
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Financial Integration

  • Progress in Cross-border Financial Transactions
  • Analysis using Price Indicators
  • Financial Spillovers
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Remittances and Tourism Receipts

  • Remittance Flows to Asia
  • Tourism Receipts
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Subregional Cooperation Initiatives

  • Central and West Asia: Central Asia Regional Economic Cooperation Program
  • Southeast Asia: Greater Mekong Subregion Program
  • East Asia: Support to CAREC and GMS Programs
  • South Asia: South Asia Subregional Economic Cooperation
  • The Pacific: Regional Approach to Renewable Energy Investments
  • Toward Regional Connectivity
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Asia-Pacific Regional Cooperation and Integration Index

  • Introduction to Asia-Pacific Regional Cooperation and Integration Index (ARCII)
  • Construction of the ARCII
  • Empirical results
  • Policy implications
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Theme Chapter: "The Era of Financial Interconnectedness: How Can Asia Strengthen Financial Resilience?"

  • Introduction
  • Experiences and Lessons from Past Crises
  • Financial Conditions, Vulnerabilities, and Cycles in Asia
  • New Global Financial Conditions and Vulnerability
  • Asia’s Financial Interconnectedness, Transmission, and
  • Spillovers of Shocks and Risks
  • Conclusions and Policy Considerations
  • Background Papers
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Statistical Appendix

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On 25 October 2017, a team of ADB researchers, led by Chief Economist Yasuyuki Sawada, presented the key findings of the AEIR 2017 at Lee Kuan Yew School of Public Policy in Singapore and to international and regional media. See news release.

Videos:

Opening Remarks by Yasuyuki Sawada, Chief Economist and Director General, ADB
Presentation on the Key Findings of AEIR 2017: "The Era of Financial Interconnectedness—How can Asia Strengthen Financial Resilience?" by Jong Woo Kang, Principal Economist, ADB
Panel discussion chaired by Yasuyuki Sawada, Chief Economist and Director General, ADB

Event Photos:

How can Asia strengthen financial resilience?
8
Feb
2018

How can Asia strengthen financial resilience?

Continued support for financial reforms is crucial to ensuring Asia's financial resilience.

New index measures progress of RCI in Asia
31
Jan
2018

New index measures progress of RCI in Asia

The newly-introduced ARCII aims to measure the extent and progress of regional cooperation and integration in Asia and the Pacific.

Greater intraregional tourism continues to visit Asia
29
Jan
2018

Greater intraregional tourism continues to visit Asia

Tourism is looking up in Asia, with increased number of travelers and tourism receipts

Trends in Asia’s Regional Trade
26
Jan
2018

Trends in Asia’s Regional Trade

Asia's trade volume growth surpassed that of world in 2016

Financial Integration in Asia
24
Jan
2018

Financial Integration in Asia

Asia's cross-border assets continue to grow, further strengthening its linkages globally.

Foreign Direct Investment in Asia
22
Jan
2018

Foreign Direct Investment in Asia

Asia's is increasingly a magnet of foreign direct investment and a prominent global investor

Free Trade Agreements in Asia
18
Jan
2018

Free Trade Agreements in Asia

ARIC's infographic illustrates the latest trends and insights on Asia's FTA landscape.












Asian Economic Integration Report 2016

What Drives Foreign Direct Investment in Asia and the Pacific?

Contents:

Cover and Highlights


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Economic Outlook and Resilience


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Trade and Global Value Chain


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Financial Integration


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Movement of People


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Subregional Cooperation Initiatives


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Special Theme: What Drives Foreign Direct Investment in Asia and the Pacific?


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Statistical Appendix


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Asian Economic Integration Report 2015

How Can Special Economic Zones Catalyze Economic Development?

Contents:

Cover and Highlights


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Progress in Regional Cooperation and Integration


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Special Chapter: How Can Special Economic Zones Catalyze Economic Development?


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Statistical Appendix


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