Asian Economic Integration Report 2018

This publication is the annual report of the Asian Development Bank (ADB) on Asia’s progress in regional cooperation and integration. It covers ADB’s 48 regional members and analyzes regional and global economic linkages. This year’s special chapter, “Toward Optimal Provision of Regional Public Goods in Asia and the Pacific”, examines how collective action among countries can help find solutions to growing transnational development challenges. It discusses how to best provide regional public goods (RPGs) that transcend the so-called “collective action problem”, which occurs when individual interests are too weak on their own to drive cooperation on common issues. The chapter suggests that multilateral development banks should act as honest broker in enhancing mutual trust and facilitating regional cooperation for RPGs.

  • 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 Economic Outlook and Development Challenges

  • Economic Outlook and Risks
  • Development Challenges: Vulnerabilities to Economic, Environmental, and Social Shocks
  • Regional Integration as Development Strategy
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Trade and the Global Value Chain

  • Recent Trends in Asias Trade
  • Asias Intraregional Trade
  • Progress of Global and Regional Value Chains
  • Updates on Regional Trade Policy
  • Trade Remedies
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Foreign Direct Investment

  • Trends and Patterns of Foreign Direct Investment in Asia
  • Outward Foreign Direct Investment
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Financial Integration

  • Asias Cross-Border Financial Assets and Liabilities
  • Inward Portfolio Investment
  • Outward Portfolio Investment
  • Inter- and Intra-Subregional Portfolio Investment
  • Bank Holdings
  • Analysis Using Price Indicators
  • Financial Spillovers
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Movement of People

  • Migration
  • Remittances
  • International Tourism Receipts and the Movement of Tourists
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Subregional Initiatives

  • Central and West Asia: Central Asia Regional Economic Cooperation Program
  • Southeast Asia: Greater Mekong Subregion Program
  • East Asia: Support for RCI Initiatives under CAREC and GMS Subregional Programs and Knowledge-Sharing Activities
  • South Asia: South Asia Subregional Economic Cooperation
  • The Pacific: Building Regional Disaster Resilience through Contingent Financing
  • Improving the Provision of Public Goods through Regional Cooperation
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Theme Chapter: Toward optimal provision of regional public goods in Asia and the Pacific

  • Introduction
  • Concepts, Typologies, and Issues in Efficient Provision
  • Regional Public Goods in Asia
  • Measurement Issues and Case Studies on Provision Mechanisms
  • Conclusions and Policy Considerations
  • Background Papers
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Statistical Appendix

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