State of the Region 2014-2015

The 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.

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State of the Region Report 2014-2015

Content:

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

ANNEX A

ANNEX B

Member Committees