ADB – Asian Economic Integration Report, 2024

The Asian Economic Integration Report by ADB for 2024 highlights the steady growth of regional integration in Asia and the Pacific since the mid-2000s, particularly in areas such as technology and digital connectivity. However, it notes a slowdown in trade and investment integration since 2019, with varying trends across subregions. The report emphasizes the importance of regional integration in providing a buffer against global shocks and highlights the need for increased cooperation and investment in connectivity to enhance economic resilience. In terms of trade and global value chains, Asia experienced a decline in trade growth in 2022, with divergent trends across economies. The report also discusses Asia's participation in global value chains, noting a reorientation towards more regional value chains, particularly in forward linkages. The evolving trade policy landscape in Asia, with the signing of new agreements, is also highlighted. In terms of cross-border investment, the report discusses the resilience of foreign direct investment inflows to and from Asia despite a sluggish global investment environment in 2022. It discusses the risks and opportunities posed by fragmented FDI and the need for economies to adopt market-friendly FDI policies. Lastly, the report addresses financial integration in Asia, noting the region's increased exposure to financial shocks due to its financial openness. It discusses the impact of US dollar funding shocks on the region and suggests policy measures to mitigate risks, such as strengthening bank balance sheet resilience and developing local currency bond markets.