Publication in Economics, Politics and Public Policy in East Asia and the Pacific

A chance for Chinese economic leadership

Chinese President Xi Jinping attends a welcoming ceremony at the Great Hall of the People in Beijing, China, 25 October, 2019 (Photo: Reuters/Lee).

Authors: Peter A Petri, Brandeis University and Michael G Plummer, Johns Hopkins University

In late June 2020, 15 East Asian countries — representing nearly 30 per cent of the world’s economic output and population — committed to signing the Regional Comprehensive Economic Partnership (RCEP) in November. This will be the largest free trade agreement ever and complements the 2018 Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

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How global value chains will evolve in the post-COVID-19 economy

Workers are busy at assembling a vehicle along the production line at a workshop of Shandong branch of Chinese state-owned automobile and commercial vehicle manufacturer JAC Motors, Qingzhou county-level city, Weifang city, east China's Shandong province, 31 May 2020 (Reuters).

Author: Satoshi Inomata, IDE-JETRO

According to traditional trade theory, the direction and magnitude of product flows are principally determined by the comparative advantages of trading countries. These comparative advantages depend on endowments of production factors: labour, capital (including human capital) and land (or natural resources). Forces integrating the different factor endowments of various countries — especially capital and technologies from advanced economies and cheap labour from developing countries — drive the development of global value chains (GVCs). Read more…

What lies ahead for global value chains in Asia?

An aerial view of containers piled up at Yangshan Port, a deep water port for container ships, waiting to be stored and exported, Shanghai, 20 March 2020 (Reuters).

Authors: Hoe Ee Khor and Suan Yong Foo, AMRO

Against a backdrop of trade tensions, disruptions from the COVID-19 pandemic and a global recession, global value chains (GVCs) are being tested like never before. This is raising uneasy questions for Asian economies. Read more…

What next for New Zealand in its post-COVID-19 era?

A bull statue with a mask covering its face is seen in a township called Bulls, near Palmerston North, on the west coast of the North Island of New Zealand, amid the global outbreak of the coronavirus disease (COVID-19), 12 July 2020. (Photo: Reuters/Praveen Menon).

Authors: Nick Wilson and Michael Baker, University of Otago

Having successfully eliminated COVID-19, New Zealand now faces the option of sitting tight or exploring various ways of loosening its stringent border controls. All these options involve complex health and economic trade-offs. Read more…

Indonesian investment in northern Australian agriculture

Cattle wait in an enclosure at a livestock export yard in Noonamah, about 50 km south of Darwin, Australia (Photo: Reuters/Tim Wimborne).

Author: Ashley Vines, University of Melbourne

Indonesia is Australia’s oldest trading partner, with Aboriginal people from northern Australia having traded goods and produce with Makassan people long before European settlement. But this long-standing trade connection remains underdeveloped given the size, complimentary economies and proximity of the two countries. This is particularly the case in the agricultural sector.

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Global value chains aren’t going anywhere

An employee wearing a face mask works on a car seat assembly line at Yanfeng Adient factory in Shanghai, China, as the country is hit by an outbreak of the new coronavirus disease (COVID-19), 24 February 2020 (Photo: Reuters/Aly Song).

Author: Christian Bachheimer, Singapore

Countries across the world are already attempting to decouple global value chains (GVCs) in preparation for the post-COVID-19 future. This is both motivated by security concerns brought about by COVID-19 and a continuation of the post-global financial crisis deglobalisation campaign. But are the forces of decoupling really operating unimpeded, or will GVCs prove too resistant? Read more…

COVID-19 punishes Indonesian commodity exporters

A worker prepares to label barrels of oil at the state oil company Pertamina's production facility in Cilacap, Central Java, Indonesia, 6 November 2017 (Photo: Antara Foto/Rosa Panggabean via Reuters).

Authors: Donny Pasaribu and Krisna Gupta, ANU

Predictions of recessions in countries affected by COVID-19 no longer surprise anyone, but the outlook may be getting even worse for commodity-exporting countries. The World Bank forecasts that the economies of commodity-exporting developing countries will shrink by 4.8 per cent, a much sharper decline than other developing countries. This is important for Indonesia, where natural resources — especially oil, gas, coal and palm oil — have an outsized role in the economy.

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Trade, deglobalisation and the new mercantilism

A truck moves a shipping container at Pyeongtaek port in Pyeongtaek, South Korea, 9 July 2020 (Photo: Reuters/Kim Hong-Ji).

Author: Razeen Sally, NUS

The COVID-19 pandemic is accelerating changes underway since the global financial crisis (GFC) in 2008. It is ushering in a new era of deglobalisation and protectionism — a new mercantilist world order. Three global shifts will likely shape international trade beyond the immediate crisis and into the ‘post-vaccine’ future. Read more…

Building on the modular design of DEPA

New Zealand's Prime Minister Jacinda Ardern meets with Singapore's Prime Minister Lee Hsien Loong at the Istana in Singapore, 17 May 2019 (Reuters/Feline Lim).

Author: Giridharan Ramasubramanian, ANU

On 12 June 2020, three countries — Chile, New Zealand and Singapore — signed the Digital Economy Partnership Agreement (DEPA), deepening their international cooperation on digital economy issues. One of the most unique aspects of DEPA is its innovative modular design, which trade policymakers in other countries should explore and build upon. Read more…

India squanders its comparative advantage

Employees sew clothes at a garment factory in New Delhi, India, 29 September 2014 (Photo: Reuters/Adnan Abidi).

Author: John West, Sophia University

East Asia’s successful economies have achieved astonishing economic growth through export-driven development. They have exploited their comparative advantage of having an abundance of lower-skilled labour to drive economic growth. India should be digging into its comparative advantage too.

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Vietnam’s environmental challenges risk EU free trade

A worker rides his motorcycle near lorries transporting coal at a port of the Cua Ong Coal Preparation Company in Cam Pha town, Quang Ninh, Vietnam (Photo: Reuters/Kham).

Author: Thang Nam Do, ANU

Vietnam needs to address environmental challenges to fully reap the benefits from its new free trade and investment agreements with the European Union. On 8 June, Vietnam’s National Assembly ratified the EU–Vietnam Free Trade Agreement and Investment Protection Agreement, following the European Parliament’s approval in February. Ratifying the agreement clears the path for Vietnam to expand exports to the potentially lucrative EU market and to attract more investment from the economic bloc.

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Fast-tracking a Philippine–EU free trade agreement

Philippine President Rodrigo Duterte gestures during the opening session of the ASEAN and European Union summit in Pasay, Manila, Philippines, 14 November 2017 (Photo: Reuters/Dondi Tawatao).

Author: Stacey Nicole M Bellido, Manila

The Philippines is at a critical juncture in its economic relations with the European Union over free trade agreement (FTA) negotiations. As the economic consequences of pandemic grip the world, the Philippines should seize this opportunity to revive negotiations and secure a Philippine–EU FTA to help drive a long-term and sustainable economic recovery.

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Reimagining global value chains after COVID-19

Author: Shujiro Urata, Waseda University

COVID-19 is exposing the vulnerability of global value chains (GVCs). GVCs contribute to rapid economic growth by enabling multinational corporations to increase their efficiency through fragmented, task-based specialisation. But they are now quickly spreading the negative economic impacts of COVID-19 from China to many other countries. Read more…

Supply chain management and economic statecraft: a five-point agenda

COVID-19 has disrupted global supply chains that rely heavily on manufactures and factories in China. Cargo ships are seen at the Port of Oakland, California, 9 March 2020 (Photo: Reuters/ Yichuan Cao).

Author: Heiko Borchert, Borchert Consulting & Research AG

The COVID-19 pandemic, the lockdown ordered by governments to contain its spread and the unexpected oil price drop in March 2020 have crippled the world economy. These multiple shocks were a harsh wake-up call illustrating inadequate levels of national preparedness.

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South Korea can help drive Asia’s recovery post-COVID-19

People wearing face masks to protect themselves from contracting COVID-19 in Seoul, South Korea, 22 April 2020 (Photo: Reuters/Heo Ran).

Author: Choong Yong Ahn, Chung-Ang University

Having been hit early by the COVID-19 crisis, some East Asian economies are also recovering early — including South Korea. The early movers should work together to achieve regional economic reconstruction and eventual global recovery. Prioritising the exhaustive prescriptions of the Asian Strategy for Recovery and Reconstruction after COVID-19, released by the ANU’s Asian Bureau of Economic Research (ABER), could be a start.

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