APEC, East Asia Consortium and Global Imbalance

Transcription

1 APEC, East Asia Consortium and Global Imbalance --for US-JI Symposium 2010 Xiaopeng Yin UIBE, China

2 Presentation Outline 1. Proposed Role and Current Status of APEC Economic integration and regional co-op platform 2. Asia-Pacific Area and East Asia in the World: Major Trading Blocs in the world 3. Emergence of TPP: Stumbling bloc or building bloc for APEC? 4. Future of APEC: Some Expectations

3 Presentation Outline (Cont.) 5.Global Trade Imbalance: East Asia s and Three Trading Blocs Roles in the world Trade 6. Global Financial Imbalance: 7. Can we save the world

4 1. Proposed Role and Current Status of APEC Economic integration and regional co-op platform: Not completely achieved Precisely: a valuable platform for regular discussions among high-level officials on economic issues for which the rules-based institutions like WTO, WB, and IMF either don't have scope or aren't sufficiently nimble (a friend s personal idea from USITC) Economic role:??

5 2. Asia-Pacific Area and East Asia in the World: I Three big trade blocs in the world: Why call them as Trading bloc :? EU, NAFTA, East Asia: First two are FTA, and last one is only a bloc

6 Three Trading Blocks and Top Ten Export Markets by Share of World Nominal GDP, 2010 and 2015 USA China Japan 燝 ermany 燜 rance UK Brazil Rusian Indian 營 taly ASEAN East Asia NAFTA EU27 China is already the second largest economy in 2010 East Asia will be the largest economic bloc by Data Source: IMF, World Economic Outlook Database, October 2010

7 2. Asia-Pacific Area and East Asia in the World: II Accumulated Number of FTAs in Asia: Chart Title Proposed Under Negotiation In Effect Original Data Source: Asia regional Integration Center (contributed from Dr. Zhi Wang, USITC)

8 2. Asia-Pacific Area and East Asia in the World: III FTA Status for Major Economies in East Asia: 2010 Singapore Korea China Thailand Japan Malaysia Indonesia Viet Nam Philippines Taiwan Proposed Framework Agreement Signed Under Negotiation Signed In Effect Original Data Source: Asia regional Integration Center (contributed from Dr. Zhi Wang, USITC)

9 Asia-Pacific Area and East Asia in the World: IV 1) In Asia: I: ASEAN, its extension: 10+1, 10+3, 10+6, 10+n? One approach to the closer regional economic integration in East Asia 2) In Asia: II: Northeastern Asia FTA: Japan + China + South Korea? Lack of enough incentive from some countries

10 2. Asia-Pacific Area and East Asia in the World: V 3) In Asia: III: South Asia: Integrating with Others? Weak regional integration and expect to integrate with other outside countries 4) In Asia: IV: Australia, New Zealand and other Pacific Areas: Integrating with Others? Already signing some FTA with others and positively expect to sign more. Question: who is the next?

11 2. Asia-Pacific Area and East Asia in the World: VI 5) In Americas: NAFTA and its Expansion NAFTA expands to the South America: Chili, and others Question: which one is the target country the USA chooses in the next round?

12 3. Emergence of TPP Stumbling bloc or building bloc for APEC? Or Replacement of APEC (on its economic role)? The expected future: rationality and outside reaction (EU, WTO, etc.)

13 4. Future of APEC: Some Expectations Some Expectations: (ASEAN 10+3)+(NAFTA)+BRICs (or CIVITS) Possible way to include all of above together: Big jump to real globalization as expanding regional integration: approach to real WTO

14 Manufacturing Export Destination of the 3 Trading Blocks - Intermediates, final goods and value-added exports, 2004, % East Asia value-added exports depend more on external market than gross trade data show East Asia is the world largest destination of intermediate exports Easia-int Easiafinal Easia-va NAFTAint NAFTAfinal NAFTAva EU-int EU-final EU-va World- Intsh Worldfinalsh Worldvash EAsia NAFTA EU ROW East Asia = ASEAN Taiwan + Hong Kong Data Source: Value-added trade estimate by Zhi Wang s calculation (USITC)

15 Manufacturing Import Sources of the 3 Trading Blocks - Intermediates, final goods and value-added imports, 2004, % Both EU and NAFTA are less depend on East Asia as supply source in valueadded term than gross trade data show Share of World East Asia is the world largest import source of final goods Easia-int Easiafinal Easia-va NAFTAint NAFTAfinal NAFTAva EU-int EU-final EU-va World- Intsh Worldfinalsh Worldvash East Asia = ASEAN + 3 EAsia NAFTA EU ROW + Taiwan + Hong Kong Data Source: Value-added trade estimate by Zhi Wang s calculation (USITC)

16 5.Global Trade Imbalance: What is Special for East Asia as a Trading Bloc On the one hand: Very high intra-regional dependence on intermediate trade in manufacturing sectors, On the other hand: About 70% final manufacturing exports depend on external demand (Zhi Wang, USITC) In general: East Asian countries: diversifying Most East Asian countries: Deeply involving the vertical specialized global production chain and stay at the low end of such production chain. Japan and China: the major parts staying at high and low ends, which shows different stage of economic development

17 6. Global Financial Imbalance: Exchange rates Adjustment: Changing the absolute advantage, but not necessarily Changing the comparable advantage: especially for the trade between the U.S. & the Asia FDI and Capital Flows: Always chasing the high returns in the world Conclusion: could not be changed dramatically by short-run policies

18 7. Can we save the world Position of East Asia Economies in Global Trade/Economy: Allowing other countries Benefit from the global production chain/ System by its production at the low end of such chain (high demand for resources & low value-added) and cheap and large supply to the global production to support the world economy Due to the features of East Asian trade/economy discussed in Chap.5, it could be sensible to both supply and demand side shocks which could be different with other emerging developing countries which are less integrated into the three major regional production blocs

19 7. Can we save the world Given the burden of the Doha Round, many different FTAs are emerged. Trade liberalization seems to be achieved in some unexpected ways. East Asia is becoming the largest economy bloc. It could induce more FTAs, or at least closer economic integration within and across the three world largest trading blocs. This kind of integration could strengthen the world economy, if there is no distortion from protectionism. Even so, there is uncertainty on financial imbalance. Conclusion: Yes, sometime we can!

20 Thanks Everyone!