Asian Economic Integration Report 2025

Harnessing the Benefits of Regional Cooperation and Integration

The Asian Economic Integration Report 2025 analyzes how regional integration has driven growth in Asia and the Pacific over the past 2 decades. This integration has significantly impacted trade, global value chains, foreign direct investment, finance, migration, remittances, and tourism. Despite strong regional cooperation, growing geopolitical tensions and global fragmentation call for renewed focus on regional cooperation to cushion external shocks. Modernizing trade and investment agreements, enhancing regional financial arrangements, and advancing digitalization will help drive economic prosperity, bridge the digital divide, and navigate geopolitical and economic challenges in the coming decades.

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  • Regional integration of trade and investment has advanced in Asia and the Pacific, leaving room for improvement in environmental cooperation.

  • Differences in national and global goals mean that commitments to regional cooperation measures vary. East Asia and Southeast Asia lead in regional integration, while other subregions must catch up to become more resilient to global uncertainties.

  • The Asia-Pacific Regional Cooperation and Integration Index (ARCII) highlights the value of regional cooperation through institutions. It reveals the great potential of digital connectivity and climate solutions to benefit regional populations.

  • Asia and the Pacific’s deepening integration into regional value chains underscores the utility of regional sourcing to strengthen supply chains and reduce global trade risks.

  • Preferential Trade Agreements within and beyond Asia and the Pacific continue to flourish, driven by trade growth, MFN tariff rates, and bilateral interventions.

  • Services, digital, and green industries are now major areas for foreign investment in Asia and the Pacific. The region needs to adapt to this changing investment landscape.

  • Economies should embrace policy options to mitigate the impact of geopolitical risks.

  • Global monetary easing could increase capital inflows, requiring vigilance against swings in capital flows and exchange rate volatility.

  • Reinvigorating regional cooperation is vital for Asia’s financial integration, strengthening financial safety nets and improving surveillance to maximize benefits while minimizing integration costs.

  • Cross-border migrants from Asia increasingly seek opportunities beyond the region. Meanwhile, bilateral labor agreements offer more openings for low and semi-skilled workers within the region.

  • Remittances to Asia maintained resilience as inflows reached $392 billion in 2024. The region is pursuing digitalization to expand financial inclusion and reduce transfer costs.

  • Greater cooperation and investment in connectivity should be prioritized for air transportation as at least 60% of Asia’s tourists travel by air.

Contents:

Cover and highlights

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Overview

  • Trends in Regional Integration in Asia and the Pacific
  • Asia-Pacific Regional Cooperation and Integration Index: Subregional Initiatives
  • Subregional Cooperation Initiatives in Asia and the Pacific
  • References
  • Annex 1a: ADB’s Bilateral Economic Integration Index—Economy and Regional Coverage
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Trade and Global Value Chains

  • Introduction
  • The Evolving Nature of Preferential Trade Agreements
  • Recent Drivers of Preferential Trade Agreements
  • Trade Within Preferential Trade Agreements
  • Trade Effects of Preferential Trade Agreements
  • Rising Complexity and Compliance Costs of Trade Agreements
  • Challenges and Opportunities for Regional Cooperation and Integration
  • References
  • Annex 2a: Directional Analysis of Drivers of Preferential Trade Agreements in Asia and the Pacific
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Cross-Border Investment

  • Updates on Foreign Investment in Asia and the Pacific
  • A Decade of Foreign Investment in Asia
  • Structural Trends in Foreign Investment in Asia
  • Leveraging FDI Through Regional Cooperation
  • Geopolitical Fragmentation and Foreign Direct Investment
  • Policy Recommendations
  • References
  • Annex 3a: Foreign Investment Linkages in Selected Sectors—Firm-Level, Asia and the Pacific, 2013–2017
  • Annex 3b: Subregional Cooperation Initiatives and Foreign Direct Investment Policy in Asia and the Pacific
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Financial Integration

  • Financial Integration Fosters Prosperity
  • Regional Financial Integration Remains Robust to Volatility
  • Regional Financial Cooperation as a Key Pillar of Macrofinancial Stability
  • Benefits Outweigh the Costs of Well-Managed Financial Integration
  • Regional Cooperation Is the Engine of Financial Integration
  • Strengthening the Regional Financial Safety Net Is Key for Deeper Integration
  • Biodiversity-Proofing Regional Financial Cooperation
  • Options for Cooperation on Financial Integration to Rise to New Challenges
  • References
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Movement of People

  • Cross-Border Migration of Asia and Pacific Migrants
  • Migration and Regional Cooperation and Integration
  • Remittance inflows to Asia and the Pacific
  • Remittances and Financial Inclusion
  • Advancing Digitalization for Remittances and Financial Inclusion
  • Policy Implications of Remittance Digitalization
  • International Tourism Maintained Steady Growth Until 2019
  • Unique Tourism Characteristics Can Be Observed in Selected Subregions and Destinations
  • Physical and Institutional Connectivity Are Key Determinants for Tourism
  • Opportunities and Challenges
  • Recommendations for Strengthening Tourism
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Statistical Appendix

  • Regional Groupings
  • Table Descriptions
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