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42. China and Geoeconomic Dynamics in Central Asia: Balancing Global Strategies, Local Interests and Multiple Partners
- Author:
- Aliya Tskhay
- Publication Date:
- 10-2021
- Content Type:
- Working Paper
- Institution:
- Finnish Institute of International Affairs
- Abstract:
- Central Asia is at the core of China’s ambitious Belt and Road Initiative (BRI), which promises to bring connectivity, trade, and improved infrastructure, as well as overall economic development to the states of the region. Yet beyond the official rhetoric, China is promoting its power through geoeconomic means. This paper looks at areas of cooperation (energy, infrastructure, trade, and finance) and identifies the ways in which China is involved with the region. Through a combination of loans, investments, and infrastructure projects, the research shows how China ‘binds’ the region closer to itself and ‘wedges’ out alternative partners. It also shows how Central Asian states utilise the funding within the BRI framework for national development programmes, whilst navigating avenues for mitigating the establishment of a dependent relationship with China. The paper concludes with some policy implications for China, Central Asia, and the wider region.
- Topic:
- Development, International Trade and Finance, Infrastructure, Hegemony, Belt and Road Initiative (BRI), and Strategic Interests
- Political Geography:
- China and Asia
43. Institutional Quality, Trade Openness and Economic Growth in South Asian Economies: Some New Insights from a Panel Data Analysis
- Author:
- Hafiz Muhammad Qasim, Abdul Majid, and Atif Jadoon
- Publication Date:
- 01-2021
- Content Type:
- Journal Article
- Journal:
- South Asian Studies
- Institution:
- Department of Political Science, University of the Punjab
- Abstract:
- The main aim of the present study is to empirically investigate into the question whether the Institutional Quality (IQ) and Trade Openness (TO) are competitors or complements in Economic Growth (EG) in case of sample South Asia Economies; “India, Bangladesh, Pakistan, and Sri Lanka”. The panel data for the period of 1984-2018 has been utilized. The Fixed Effects Model (FEM) estimation technique has been applied for empirical investigation. The empirical results of FEM confirm the positive and statically significant impact of IQ and Interaction Term on Economic Growth in sample countries. The positive significant results strongly supported the hypothesis of this study, the IQ and TO are complements in EG in the case of sample SAE. The IQ measure has also established positive and significant effects on EG while the TO has a negative impact. Based on empirical findings, this study recommends that the policymakers of sample countries should make policies that strengthen the IQ, in order to improve trade and, consequently, the EG.
- Topic:
- International Trade and Finance, Economic Growth, Institutions, and Economic Theory
- Political Geography:
- South Asia and Asia
44. The COVID-19 Pandemic and the World Trade Network
- Author:
- Kozo Kiyota
- Publication Date:
- 03-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Global trade is expected to suffer a significant contraction as a result of the COVID-19 pandemic. Did the relative importance of countries in the world trade network change as a result of the pandemic? The answer to this question is particularly important for Association of Southeast Asian Nations (ASEAN) countries because of their strong trade linkages with China, where the COVID-19 virus originated. This paper examines how the world trade network has changed since the COVID-19 pandemic, with a particular focus on ASEAN countries. Tracking the changes in centrality from January 2000 to June 2020, we find no evidence that centrality changed significantly after the pandemic started for most ASEAN countries. Our results suggest that the relative importance of the ASEAN countries in the world trade network is unchanged and will remain unchanged even after the pandemic.
- Topic:
- Globalization, International Trade and Finance, Pandemic, and COVID-19
- Political Geography:
- Asia and Southeast Asia
45. The COVID-19 Pandemic, Air Transport Perturbation, and Sector Impacts in ASEAN Plus Five: A Multiregional Input–Output Inoperability Analysis
- Author:
- Tamat Sarmidi, Norlin Khalid, Sufian Jusoh, and Muhamad Rias K.V. Zainuddin
- Publication Date:
- 04-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This study simulates the sector impacts of demand-side perturbations on air transport sectors due to the COVID-19 pandemic, focusing on ASEAN members plus Australia, China, Japan, the Republic of Korea, and New Zealand. This study involves (i) the generation of a multiregional input–output table from the latest Global Trade Analysis Project data, (ii) a network analysis to determine the importance of the air transport industry in each country, (iii) multiplier and linkages analyses, (iv) determinations of sector impacts from demand-side perturbations on air transport sectors due to the COVID-19 pandemic, and (v) simulation of the effect of fiscal and monetary measures to mitigate the pandemic’s impact. This study demonstrates that the aviation industry is a key sector in domestic and regional economic activities, and the reduction in air transport consumer demand due to the pandemic is estimated to cause gross domestic product (GDP) reductions from 0.4% to 2.1%. Government intervention, through fiscal and monetary policies, has, however, mitigated severe impact, moderating GDP and value-added losses. Thus, a viable policy prescription for the aviation industry is of utmost importance.
- Topic:
- Globalization, International Trade and Finance, Pandemic, COVID-19, and Travel
- Political Geography:
- Asia and Southeast Asia
46. Facilitating Trade in Pharmaceuticals: A Response to the COVID-19 Pandemic
- Author:
- Ben Shepherd
- Publication Date:
- 04-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper reviews trade in pharmaceutical products, focusing on ASEAN countries. Trade in this sector is of singular policy importance as a result of the COVID-19 pandemic. First, the paper shows that pharmaceuticals are traded within Global Value Chains, which in turn means that international linkages are complex. Second, the paper shows that policy reforms can help boost trade in the sector, which has important human development implications during the pandemic period.
- Topic:
- Globalization, International Trade and Finance, Pandemic, Global Value Chains, COVID-19, and Pharmaceuticals
- Political Geography:
- Asia and Southeast Asia
47. East Asian Production Networks Amidst the COVID-19 Shock
- Author:
- Ayako Obashi
- Publication Date:
- 06-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- In the East Asian context, previous studies showed that trade occurring through production networks remained relatively steady amidst an economic shock and recovered faster and stronger once the shock was over. Using finely disaggregated product-level monthly bilateral trade data, we examine whether network trade in the East Asian region has been robust and resilient in face of the COVID-19 crisis, as well as in normal times, by conducting a series of survival analyses. We find a new set of empirical evidence suggesting the robustness of East Asian network trade in normal times and its resilience even amidst the COVID-19 shock.
- Topic:
- International Trade and Finance, Public Health, Pandemic, COVID-19, and Production
- Political Geography:
- East Asia, Asia, and Southeast Asia
48. The Effect of Non-Tariff Measures on Global Value Chain Participation
- Author:
- Upalat Korwatanasakul
- Publication Date:
- 06-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This study examines the impact of non-tariff measures (NTMs) on global value chain (GVC) participation and the underlying mechanisms. Our study employs a novel approach using an additional compliance requirement indicator as a relative proxy for NTMs to measure their impact on GVC participation. We conduct a cross-sectional analysis at the industry level, spanning 19 industrial sectors in 30 countries in 2015. We combine our additional compliance requirement indicator dataset calculated from NTM data in the Trade Analysis Information System, with our dataset on trade in value added estimated from the Organisation for Economic Co-operation and Development Inter-Country Input–Output Table. Our analysis finds that, while NTMs and tariffs both negatively impact backward GVC participation, the impact of NTMs is greater than that of tariff measures. Moreover, the estimated results show that inward foreign direct investment is positively associated with backward GVC participation. Therefore, policies that reduce trade costs from policy barriers, especially NTMs, and attract more foreign direct investment can help promote GVC participation.
- Topic:
- Globalization, International Trade and Finance, Industry, Global Value Chains, and Non-Tariff Measures
- Political Geography:
- Asia and Southeast Asia
49. The Effects of SPSs and TBTs on Innovation: Evidence from Exporting Firms in Viet Nam
- Author:
- Duc Anh Dang and Vuong Anh Dang
- Publication Date:
- 06-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBTs) in destination markets may affect firms’ performance. In this paper, we examine how meeting foreign standards affects exporting firms’ innovation, reflected in the product quality, production processes, skills, and technological acquisition. The analysis relies on official regulations on non-tariff measures released by the United Nations Conference on Trade and Development (UNCTAD) and panel data for manufacturing firms in Viet Nam during 2013–2015. To correct for the potential endogeneity of SPS measures and TBTs and measurement errors, we use the number of SPS measures and TBTs imposed on other Association of Southeast Asian Nations (ASEAN) Member States as an instrument variable. Our results indicate that a higher number of SPS measures and TBTs applied by destination countries increases the probability of Vietnamese exporting firms’ skill acquisition. SPS measures also have higher positive impacts on product quality improvement and skill acquisition in the food processing sector. The SPS measures and TBTs have larger impacts on small firms than large firms. Foreign firms tend to acquire more technology and skills than domestic firms when facing SPS measures and TBTs by importing countries. Higher SPS measures and TBTs have more effects on the probability of acquiring skills by state-owned firms. However, the propensity of product quality and technological acquisition of non-state firms is much higher than that of state-owned firms when facing a greater level of SPS measures and TBTs.
- Topic:
- International Trade and Finance, Science and Technology, Governance, Innovation, and Trade
- Political Geography:
- Asia and Southeast Asia
50. Potential for India’s Entry into Factory Asia: Some Casual Findings from International Trade Data
- Author:
- Mitsuyo Ando, Kenta Yamanouchi, and Fukunari Kimura
- Publication Date:
- 06-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Despite its impressive economic growth in the past few decades, India is slow in adopting a task-by-task international division of labour or international production networks (IPNs). Using international trade data for international comparison from multiple angles, this paper visualises the position of India – particularly in machinery IPNs and information and communication technology (ICT) services. Although machinery industries are at the centre of IPNs in East Asia, the paper clearly visualises that India has not yet participated in Factory Asia. Rather, trade data indicate that India is still engaged in import-substituting industrialisation. The paper also argues that ICT services are a strength for the Indian economy, and its competitiveness could be utilised effectively by combining new technologies with traditional industries such as manufacturing. India still has huge potential for utilising the mechanics of a new international division of labour to accelerate economic growth, innovation, and poverty alleviation.
- Topic:
- Globalization, International Trade and Finance, Labor Issues, Manufacturing, Industry, and Global Value Chains
- Political Geography:
- India and Asia