State of the Region Report 2014


State of the Region 2014-2015

Sate of the region 2014The Asia-Pacific region is forecast to grow at around 3.8 percent over the next two years before moderating to around 3.5 percent in 2018-2019. While far from the heady rates of above 5 percent growth during the pre-Global Economic Crisis period it represents a steady if unremarkable recovery from the depths of dark days of the 2008-2009.




icon State of the Region Report 2014-2015


i Message from the Co-Chairs of PECC

ii Executive Summary

Chapter 1: Prospects for Growth in the Asia-Pacific Region
Contributed by Eduardo Pedrosa

  • Future Drivers of Growth
  • Changing Balance between Emerging and Advanced Economies?
    • Figure 1.1: Asia-Pacific GDP growth
  • United States
  • Box 1: The US Economy
  • China
  • Box 2: China’s Economy for 2014: Steady and Sound Growth with Reform and Innovation
  • Japan
  • Box 3: Japan: The Progress of Abenomics
  • India
  • Box 4: India: Middle Class Strikes Back
  • Southeast Asia
    • Figure 1.2: Balance of aggregate demand in selected ASEAN economies
  • Box 5: ASEAN Economy Post-2015: Issues, Challenges, Policies
  • Pacific South America
  • Oceania
  • Northeast Asia
  • The External Sector
  • Current Account Balance
    • Figure 1.3: Asia-Pacific trade growth
    • Figure 1.4: Export growth
    • Figure 1.5: Import growth
    • Figure 1.6: Transpacific current account balance
    • Figure 1.7: Asia-Pacific vs. Global Growth
    • Figure 1.8: Emerging and advanced economy growth in the Asia-Pacific
  • The Future of Growth in the Asia-Pacific
  • Balanced Growth
  • Consumption
    • Figure 1.9: Estimated changes to share of GDP 2014 (percentage points change from 2007 baseline)
  • Investment
    • Figure 1.10: Average household expenditure in Asia-Pacific economies
    • Figure 1.11 Investment as a percentage of GDP
  • Innovation and Growth
    • Figure 1.12: Contribution of total factor productivity to Asia-Pacific growth (weighted by GDP US$)
    • Figure 1.13: Asia-Pacific GDP growth (weighted average)
    • Figure 1.14: Contribution of TFP to Asia-Pacific GDP growth (weighted average)
    • Figure 1.15: Contribution of ICT capital to Asia-Pacific GDP growth (weighted average)
    • Figure 1.16: Contribution of Non-ICT capital to Asia-Pacific GDP growth (weighted average)
    • Figure 1.17: Contribution of labor quantity to Asia-Pacific GDP growth (weighted average)
    • Figure 1.18: Contribution of labor composition to Asia-Pacific GDP growth (weighted average)
    • Figure 1.19: Asia-Pacific economies ranking on global innovation index’s input-sub-index
    • Figure 1.20: Gross domestic expenditure on R&D (% of GDP)
    • Figure 1.21: Graduates in science and engineering (%)
    • Figure 1.22: University/industry collaboration
    • Figure 1.23: Firms offering formal training (% of firms surveyed)
    • Figure 1.24: Asia-Pacific economies innovation input sub-index score (0-100)
  • The Future of Growth in the Asia-Pacific

Chapter 2: Can RCEP and the TPP be path ways to FTAAP?
Contributed by Peter A. Petri and Ali Abdul Raheem

  • APEC and FTAAP
    • Figure 2.1: Timeline of regional initiatives by APEC economies
  • The Pathway Strategy
    • Figure 2.2: Comparison of TPP and RCEP objectives
  • How the Pathways Might Work
    • Figure 2.3: Membership of possible Asia-Pacific trade agreements
    • Figure 2.4: Income gains from alternative agreements (% of GDP)
  • The Benefits
  • Conclusions
    • Figure 2.5: Income gains from alternative agreements (2025 estimates)
  • References

Chapter 3: Perceptions of Growth and Integration in the Asia-Pacific
Contributed by Eduardo Pedrosa

  • Figure 3.1: Top 5 priorities for APEC Leaders to address at their upcoming meeting in Beijing (by sub-region)
  • Figure 3.2: Top 5 priorities for APEC Leaders to address at their upcoming meeting in Beijing (by sector)
  • Whither the WTO?
  • Future of Growth a Key Issue
  • Economic Outlook
  • Risks to Growth
    • Figure 3.3: Expectations for economic growth over the next 12 months compared to the last year for the following economies/ regions
    • Figure 3.4: Top 10 risks to growth
  • Lack of Political Leadership – A Shared Concern
    • Figure 3.5: Top 10 risks to growth (by sub-region)
    • Figure 3.6: Top 10 risks to growth (by sector)
  • Future Growth and Consumption in the Asia-Pacific
    • Figure 3.7: Drivers of growth over the next 5-10 years
    • Figure 3.8: Consumer expenditure in the Asia-Pacific
  • The Future Consumers
  • APEC Growth Strategy
    • Figure 3.9: Satisfaction with efforts to improve the quality of growth in the region
    • Figure 3.10: Future drivers of growth
  • Drivers of Future Growth for Individual Economies
  • Future Growth in the Asia-Pacific
  • Trade Liberalization in the Asia-Pacific
    • Figure 3.11: Critical factors for the future of Asia-Pacific growth
  • The Rule of Law
  • Workforce Training and Mobility
  • The Future of Asia-Pacific Regional Cooperation
    • Figure 3.12: Whither India in the Asia-Pacific
    • Figure 3.13: APEC membership as a top 5 priority
    • Figure 3.14: Views on the Free Trade Area of the Asia-Pacific (FTAAP)
  • Towards an FTAAP
  • How likely are any of the regional trade deals to reach a conclusion ?
  • Ambivalence Reigns
    • Figure 3.15: Likelihood of RTAs reaching a conclusion within next 3 years
    • Figure 3.16: Undecided, uninformed, or unwilling
  • Need for Outreach
  • Priority Issues for Regional Trade Agreements
    • Figure 3.17: Priority issues for regional trade deals
    • Figure 3.18: Priority Issues for regional trade deals
  • The Future of APEC
  • Southeast Asians More Positive on APEC
    • Figure 3.19: APEC is as important or more important today compared to 1989 when it was created
    • Figure 3.20: Views on APEC over time
  • North American Ambivalence
  • APEC’s Importance for South America
  • APEC: New Challenges and Agenda Ahead for Asia-Pacific Cooperation

Chapter 4: Annual Report of the Composite Index of Economic Integration in the Asia-Pacific Region: 1990~2011
Contributed by Bo Chen

  • Figure 4.1: Composite index of regional economic integration>
  • Figure 4.2: Comparison of 2010 and 2011 indices
  • Asia-Pacific Trade Flows
    • Figure 4.3: Intra-regional trade flows
    • Figure 4.4: Intra-regional flows of foreign direct investment
    • Figure 4.5: Intra-regional tourist inflows (% of total)
    • Figure 4.6: Convergence index
  • Foreign Direct Investment
  • Tourism Flows
  • Convergence Index
    • Figure 4.7: Deviation of GDP per capita
    • Figure 4.8: GDP per capita growth
  • Diverging Incomes
    • Figure 4.9: Deviation indicator: urban resident ratio
    • Figure 4.10: Deviation indicator : share of non-agriculture in GDP
    • Figure 4.11: Deviation indicator: expenditure on education as a proportion of GNI
    • Figure 4.12: Deviation indicator: life expectancy



Member Committees

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Discussion Forum

Going It Alone in the Asia-Pacific: Regional Trade Agreements Without the United States
Peter A. Petri (PIIE), Michael G. Plummer (Johns Hopkins University and East-West Center), Shujiro Urata (Waseda University) and Fan Zhai (Former Managing Director, China Investment Corporation)

The Linkage between Services and Manufacturing in the US economy
Sherry M. Stephenson, Senior Fellow, International Centre for Trade and Sustainable Development

Digital DNA: Disruption and the Challenges for Global Governance
Peter F. Cowhey (University of California, San Diego), 
Jonathan D. Aronson (University of Southern California)

Growth in a Time of Change
Pamela Mar, Director of Sustainability, Fung Academy | Fung Group

Why Connectivity is a starting point for real change
Pamela Mar, Director of Sustainability, Fung Academy | Fung Group

The TPP lives on – and Canada should be part of it
Hugh Stephens, Vice-chair, CANCPEC

After the TPP: What’s Next for Canada in Asia?
Hugh Stephens, Vice-chair, CANCPEC