How Important Are Global Value Chains for The Indo-Pacific?
HKUST IEMS Thought Leadership Brief No. 81
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The retrenching activities through Global Value chains (GVCs) suggest that economic globalization has recently stagnated, particularly in the Indo-Pacific region. As China remains a major player in GVCs globally, the key question is whether Indo-Pacific economic integration can be developed even if China is not part of this geography. The Indo-Pacific region, which includes Australia, India, Japan, the US, and ASEAN member states, has seen varying degrees of participation in GVCs, with ASEAN being the most integrated. That said, ASEAN’s progress in GVC integration is mainly associated with China, while integration with other Indo-Pacific countries is declining except for India, whose size is hardly relevant compared to China. The Indo-Pacific Economic Framework for Prosperity (IPEF) could facilitate greater trade and investment exchanges among Indo-Pacific countries, but given the unbalanced developments in the region bilaterally, and that China remaining in the centre stage, it remains to be seen whether it will have a significant impact on the region's supply chain integration.
Keywords:Globalization, Deglobalizaiton, Regional Integration, Global Value Chains (GVCs), Indo-Pacific, Economic Integration
About the author
Alicia Garcia Herrero is the Chief Economist for Asia Pacific at Natixis. She also serves as Senior Fellow at the Brussels-based European think-tank BRUEGEL and a non-resident Senior Follow at the East Asian Institute (EAI) of the National University Singapore (NUS). Alicia is also Adjunct Professor at the Hong Kong University of Science and Technology. Finally, Alicia is a Member of the Council of Advisors on Economic Affairs to the Spanish Government and an advisor to the Hong Kong Monetary Authority’s research arm (HKIMR) among other advisory and teaching positions. More >>
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