Asia-Pacific exports set to grow at 10.5 per cent in 2011
According to a new United Nations Report exports are driving a V shaped recovery in Asia and the Pacific with developing economies in the region posting double-digit growth for both exports and imports in 2010.
The Asia-Pacific Trade and Investment Report 2010 released today by the UN Economic and Social Commission for Asia and the Pacific (ESCAP) states that in 2010, developing economies in the region posted growth for exports and imports, at 19.3 per cent and 20.2 per cent respectively. Exports are expected to grow at a robust rate of 10.5 per cent in 2011, led by China, India, Turkey and Malaysia.
“While the stimulation of domestic demand and investment has also played an important role in reviving many economies, we find that exports continue to be a major engine of growth in the region” said Mr. Ravi Ratnayake, Director of Trade and Investment Division at ESCAP. “As a result, Asia’s share in world exports continues to rise.”
The report notes that the strong performance of exports and trade in general, is the result of a vibrant China which imports intermediate goods from the rest of Asia and exports finished goods to the rest of the world. Intraregional trade has increased but remains largely focused on intermediate goods, while exports in finished goods and services are still dependent on mostly western markets.
“In developed country markets Asia-Pacific exports often face murky protectionism with measures that are imposed ostensibly for health reasons or environmental protection purposes but are really hidden measures to protect domestic industries,” said Mr. Ratnayake.
The report identifies several other downside risks for Asia-Pacific trade, including continued stagnation in consumer demand in Europe, Japan and the United States coupled with the adoption of austerity programmes in various countries; the debt and euro crisis in Europe; the risk of regional currency wars; and uncertainties in international trade rules.
The report warns that while Doha negotiations have stalled, the number of free trade agreements in the region continues to rise, leading to less transparency in trade rules. Currently, about 35 per cent of all trade conducted by Asia-Pacific economies takes place within the framework of such agreements.
While many countries of the region are trading more, only some are trading more efficiently, the report says. China has made impressive progress in reducing its international trade costs, now ranking along with Germany and Malaysia as one of the economies with the lowest international trade costs. Mr. Ratnayake noted that there is a lot more to do in streamlining and simplifying trade procedures in the region. “It still takes 3 times longer to complete trade procedures in Asia-Pacific developing economies than in developed economies such as Australia, Japan and New Zealand.”
Along with export growth, inflows of foreign direct investment to the region have also increased according to the report, but have yet to reach pre-crisis levels. At the same time, the Asia Pacific region almost doubled its share of global FDI outflows to 27 per cent in 2009 with an increasing share of these outflows directed to the region itself.
The report is available on: http://www.unescap.org/tid/publication/aptir2590.pdf