As an active part of the global economy, the industrial division of labor in Asia continues to adjust itself. As a result, capital flows and industrial transfers in the region have grown rapidly.
· On January 21, 2019, the Global Investment Trends Monitor released by the United Nations Conference on Trade and Development (UNCTAD) shows that global foreign direct investment into developing Asian economies increased to approximately US$ 502 billion in 2018, an increase of 5%. East Asia and Southeast Asia were the regions with the largest inflows of foreign capital, which account for one-third of global foreign direct investment in 2018.
· On October 25, 2017, in the Asian Economic Integration Report 2017 released by the Asian Development Bank (ADB) in Singapore, stated that in 2016, the share of inter-regional trade in Asia reached a record high, from an average of 55.9% in 2010 to 57.3% in 2015.
· The International Monetary Fund (IMF) predicts that Asia's share of global GDP will exceed one-third in 2030[1]. Facing slow economic recovery and industrial strategy adjustment of the developed countries in the world, Asia's closely linked inter-regional trade and investment can play a buffering role, helping Asian countries to resist the impact of global trade barriers and uncertainties in the external economic growth.
Figure 1:Major export market of Asian economies(2001-2016)
Source:
International Trade Centre, Hong Kong Trade Development Council
Note: Asia (16) include 16
economies, namely 10 ASEAN countries,
Mainland China, Hong Kong, Taiwan,
Japan, North Korea, and India.
The Asian region has a relatively sufficient labor force and lower production cost. The world's commodity manufacturing base has been concentrated in Asia, with industrial bases located in different parts of Asia. Each base carries out different production processes in the upper, middle and lower reaches. Through the diversified division of labor in the region, Asia provides raw materials, parts, and intermediates[2], and imports some materials and key components from outside of the region to process and produce various types of finished products in the Asian region. Most of the finished products are supplied to the United States and Europe, as well as to other consumer goods and terminal product markets[3].
With the rise of Japan, Four Asian Tigers, China, and India, the Asian region as the world's manufacturing center has formed a sound production chain and close trade relations. By using geographical advantages that arise from being adjacent to each other, Asian companies can plan to implement purposeful industrial docking. For example, China and ASEAN can play the double role of being the industry undertaking party and industrial transferring party.
Figure 2: The progress of "Made in Asia" (1993 vs. 2013)
Source: United Nations
The current "industrialization" is not the only path for Asian economic development. As a "consumer market," the role of the Asian region has become increasingly prominent. In the past, Japan and the emerging Asian market countries mainly met the European and American markets with processing trade exports. Nowadays, Asia's huge consumer groups, young population[4], and huge market demand have become important economic growth engines in Asia. In addition, with the continuous increase of the per capita income level in Asia[5], the urbanization process and the growing middle class, Asia has begun to have rapid, higher quality consumer demand for food, clothing, housing and transportation, as well as for services such as finance, education, tourism, medical care and pensions. It can be seen that the importance of the service industry to the future development of the Asian economy is increasingly evident[6].
Despite all these, the innovation capability and environment in Asia still lag behind that of Europe and the United States. The Asian region should seize the current internet and digital evolution trends, pursue scientific and technological progress as well as industrial innovation, attract global talents to gather in Asia, and improve the technological innovation capabilities of enterprises. This will definitely enhance Asia's overall competitiveness in the global economy, thereby making Asia a new high ground for global development and change the pattern of the world's economy on a larger scale.
[1] "Asia Leading the Way", Finance and Development, IMF, June 2010.
[2] Intermediate products include semi-processed raw materials and components, as well as intellectual property (patents, specific skills, trademarks, goodwill) and management skills.
[3] Global Production Pattern Changes Drive Asian Supply Chain, Hong Kong Trade Development Council, October 3, 2017
[4] According to the World Population Prospects: The 2017 Revision, the average age of the population of South-East Asia is 29 years old.
[5] According to the statistics of the International Labour Organization, the average wage in Asia has almost doubled from 2000 to 2011, compared with 5% in developed countries and 23% in the world.
[6] "Asia Needs to Leverage the Service Industry", People's Daily, February 10, 2014.
