Given the lacklusture growth forecast for the world economy this year, Asian economies must try to reinvigorate trade growth momentum through more liberal and freer trade regimes while forging economic cooperation with trade partners both within and outside the region, according to the Asian Development Bank’s (ADB) Asian Economic Integration Report 2024.

Asia’s global value chain (GVC) integration has turned more regional recently, especially in forward linkages. On the other hand, there are few signs of reshoring in the region, the report noted.

There is little evidence of increased sourcing of intermediates domestically or an increasing share of domestic value-added serving domestic demand in the continent.

Asia’s trade policy landscape is evolving rapidly, embracing broad, modern trade and digital agreements, although trade restrictions persist, the report observed.

To maximise the potential for industrial development, Asian economies should adopt market-friendly foreign direct investment (FDI) policies that enforce investment protection, support technology transfer and innovation, and target high productivity sectors, particularly in technology-related manufacturing and services.

While the risk of global fragmentation cloud the FDI landscape, the region can improve the environment for market-seeking FDI by building on its growing purchasing power, strengthened by rising income levels and an expanding middle class, the report added.

Fibre2Fashion News Desk (DS)

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