State of the Region 2017-2018

On behalf of the members of the Pacific Economic Cooperation Council (PECC), it is our pleasure to present our twelfth annual report on the State of the Region. This year we have chosen to focus on the internet and digital economy. In some respects, to qualify the term ‘economy’ with ‘internet’ and ‘digital’ is increasingly redundant. The adoption and embedding of the internet-based technology is becoming pervasive. The internet of things connects everything from crops to toothbrushes. The implications of this for growth, development and jobs are profound. We are likely to have to address these issues in different ways over the coming years.

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State of the Region Report 2017-2018

CONTENT

I MESSAGE FROM THE CO-CHAIRS OF PECC

II EXECUTIVE SUMMARY

III CHAPTER 1: ASIA-PACIFIC ECONOMIC OUTLOOK

• Figure 1.1: Asia-Pacific GDP Growth
• Figure 1.2: Expectations for Global Growth
• Figure 1.3: Expectations for Growth in Selected Regions

RISKS TO GROWTH

• Figure 1.4: Top-5 Risks to Growth
• Figure 1.5: Number and Type of Trade Restricting Measures Adopted by Asia-Pacific Economies
• FEARS OF INCREASED PROTECTIONISM
• Figure 1.5: Number and Type of Trade Restricting Measures Adopted by Asia-Pacific Economies

LACK OF POLITICAL LEADERSHIP

• Figure 1.6: Lack of Political Leadership as a Risk to Growth
• BOX 1.1 THE STATE OF PLAY OF REGIONAL ECONOMIC INTEGRATION INITIATIVES
• Chart 1. Macroeconomic gains and sector adjustments

POSSIBLE SLOWDOWN IN WORLD TRADE GROWTH

• Figure 1.7: Growth of Exports of Goods and Service
• Figure 1.8: Growth of Imports of Goods and Services
• Figure 1.9: GDP and Trade Volume Growth
• Figure 1.10: Are GVCs Contracting?
• Figure 1.11: Trade Value vs. Trade Volume

A SLOWDOWN IN THE CHINESE ECONOMY

FAILURE TO IMPLEMENT STRUCTURAL REFORMS

• Figure 1.12: Failure to Implement Structural Reforms as Risk to Growth
• Figure 1.13: Savings vs Investment in the Asia-Pacific
• Figure 1.14: Asia-Pacific Infrastructure Needs 2016-2040 (US$ billions)
• Figure 1.15: Investment in the Asia-Pacific Region (% of GDP, 2017 and 2020)

BOX 1.2 THE BELT AND ROAD INITIATIVE: A NEW FRONTIER FOR WIN-WIN COOPERATION

• Injecting Impetus into World Economy
• Development Opportunities for Participating Economies
• Important Practice for a New Type of International Relations

PROSPECTS FOR FREER TRADE

• Figure 1.16: Political Environment for Freer Trade and Investment

WHAT PROSPECTS FOR THE FTAAP?

• Figure 1.17: When will the RCEP be completed?
• Figure 1.18: When will the TPP 11 be completed?
• Figure 1.19: Will the US Rejoin the TPP?
• Figure 1.20: Likelihood of US Rejoining the TPP under a Different Name

PRIORITIES FOR THE APEC LEADERS’ MEETING

• Figure 1.21: Priorities for APEC Leaders’ Meeting in Danang

BOX 1.3 INCLUSIVE GROWTH AGENDA FOR THE ASIA-PACIFIC REGION 

• Digital Economy
• MSMEs
• Women Empowerment
• Jobs and Skills

IV CHAPTER 2: AN ASIA-PACIFIC AGENDA FOR THE DIGITAL ECONOMY

INTRODUCTION

DIGITIZATION: REDUCING FRICTIONS,INCREASING TENSIONS?

CHANGING BUSINESS MODELS?

   INCLUSION

• Figure 2.1: Asia-Pacific Cost of Internet Access (Mobile Broadband Price, % GNI per capita 1GB)
• Figure 2.2: Average Internet Speed in the Asia-Pacific
• Figure 2.3: Mobile and Electricity per capita for Selected Emerging Asia-Pacific Economies

   DIGITAL ECONOMY AND JOBS

• Figure 2.4: Impact of the Digital Economy on Jobs

   EDUCATION

THE POLICY AGENDA

AN ASIA-PACIFIC AGENDA

• Figure 2.5: Policy Priorities for the Digital Economy

   INTERNATIONAL COOPERATION

CONCLUSION

V CHAPTER 3: INDEX OF ECONOMIC INTEGRATION IN THE ASIA-PACIFIC

• Figure 3.1: Composite Index of Regional Economic Integration
• Table 3.1: Weights Used Composite Index
• Table 3.2: Comparison of 2013 and 2014 Indices

ASIA-PACIFIC TRADE FLOWS

• Figure 3.2: Intraregional Trade Flows (% of GDP)

FOREIGN DIRECT INVESTMENT

• Figure 3.3: Intraregional Flows of Foreign Direct Investment (%)
• Figure 3.4: Intraregional Tourist Inflows (% of total)

TOURISM FLOWS

• Figure 3.5: Convergence Index

CONVERGENCE INDEX

• Figure 3.6: Deviation of GDP Per Capita

LESS DIVERGING INCOMES

• Figure 3.7: GDP Per Capita Growth
• Figure 3.8: Deviation Indicator: Urban Resident Ratio
• Figure 3.9: Deviation Indicator: Share of Non-agriculture in GDP
• Figure 3.10: Deviation Indicator: Expenditure on Education as a Proportion of GNI
• Figure 3.11: Deviation Indicator: Life Expectancy

VI ANNEX A FOR CHAPTER 1

• Table 1: GDP Growth
• Table 2: CPI Inflation
• Table 3: Growth of Exports of Goods and Service
• Table 4: Growth of Imports of Goods and Services 2015 2016
• Table 5: Current Account Balance (US$ billions)
• Table 6: GDP & CPI Weights 
• Table 7: Export Weights 
• Table 7: Import Weights 

VII ANNEX B FOR CHAPTER 2: RESULTS OF ASIA-PACIFIC POLICY COMMUNITY SURVEY

GOVERNMENT

BUSINESS

NON-GOVERNMENT: RESEARCH COMMUNITY/CIVIL SOCIETY/MEDIA

RESPONDENT BREAKDOWN

BREAKDOWN OF RESPONDENTS BY SECTOR

BREAKDOWN OF RESPONDENTS BY SUB-REGION

VIII MEMBER COMMITTEES