Economic Trends Across the Asia Pacific Region Pansy Yau Deputy Director of Research
2 Rebalancing of the World Economy % 70.00 65.00 60.00 55.00 50.00 45.00 40.00 35.00 Share of world total GDP (PPP) 30.00 25.00 Advanced economies Developing economies 20.00 1980 1985 1990 1995 2000 2005 2010 2015 2020 Source: World Economic Outlook Database October 2015
Development in the Asia Pacific % 25 Share of world total GDP (PPP) 20 15 10 5 Dragon(4) ASEAN(5) China India Japan Aus-NZ US 0 1980 1985 1990 1995 2000 2005 2010 2015 2020 3 Source: World Economic Outlook Database October 2015
China Adjusting to a New Normal, ASEAN(5) and India Gathering Pace % 16 Real GDP growth 14 12 10 8 6 4 Emerging Asia ASEAN(5) China India 2 4 0 2000 2005 2010 2015 2020 Source: World Economic Outlook Database October 2015
5 Rising Importance in the Global Supply Chain % 18.0 Share of world total exports 16.0 14.0 12.0 10.0 8.0 6.0 ASEAN(5) India China 4.0 2.0 0.0 2000 2010 2011 2012 2013 2014 Source:International Trade Statistical Yearbook 2014
6 Emerging Middle Class Population with household disposal income over US$10,000 Percentage of Household Population (million) 2010 2015 2016 2017 2010 2015 2016 2017 South Korea 94% 96% 96% 96% 46.6 48.7 48.9 49.1 Singapore 96% 97% 97% 97% 4.9 5.4 5.4 5.5 Malaysia 69% 75% 76% 78% 19.6 22.8 23.5 24.2 Thailand 29% 30% 31% 34% 19.6 20.5 21.4 23.1 Philippines 21% 33% 35% 38% 19.1 33.0 36.0 39.7 Indonesia 21% 24% 26% 29% 50.6 62.3 68.9 76.1 Vietnam 4% 11% 12% 14% 3.7 9.8 11.4 13.0 China 25% 54% 55% 58% 336.2 734.0 762.2 802.0 India 12% 19% 22% 25% 147.7 244.2 283.9 330.0 Source: Euromonitor International
7 Growing Consumer Market Source: Homi Kharas, Brookings Institution
8 Forces Behind the Growth
9 Urbanization More than Half of the World s Mega-cities are Now Found in the Asia Pacific Urbanization 1990-2014 Source: UN World Urbanization Prospect 2014 Revision
10 Urbanization A Major Source of Economic Strength Changes in urbanization rate and GDP per capita, 2000-2010 Source: East Asia s Changing Urban Landscape, World Bank Group
FDI and Domestic Investment are Attracted to Cities with Good Infrastructure and Services Urbanization 2014-2030 11 Source: UN World Urbanization Prospect 2014 Revision
12 FDI Flows in the Asia Pacific FDI Stock in 2014 Inflow Stock US$ million Outflow Stock United States 5,409,884 6,318,640 Japan 170,615 1,193,137 Net outflow Dragon(4)* 2,712,877 2,553,725 China 1,085,293 729,585 ASEAN(5) 734,244 268,599 Net inflow India 252,331 129,578 Source: World Investment Report 2015 * Hong Kong and Singapore are service platforms channeling FDI flows into China and Southeast Asia. Taiwan and South Korea are net foreign direct investors
13 Market Reforms & Liberalization in Asia also Attracted Investment Growth WTO Economic reforms / strategies China 2001 Deepening reforms and opening up since 1978 India 1995 Reforms progress in earnest since 1991. Modi Government further relax limits on FDI ownership Malaysia 1995 Commitment to maintaining an open trade policy regime Thailand 1995 Reforms since 1986 to attract labour intensive manufacturing Philippines 1995 Structuring reforms and improvement in socio-economic development since 2010 Indonesia 1995 Major liberalization of trade and investment policies in 1994 Vietnam 2007 New commitments to market oriented reforms in 2000 Myanmar 1995 New foreign investment law passed in 2012 and foreign exchange control abolished
Growth & Expansion of the Regional Supply Chain in Asia 14 Source: HKTDC Research
15 Megatrends that are Reshaping Asia
16 Three Major Axes Connectivity Productivity Sustainability
17 Connectivity Trade and Economic Agreements RCEP BRI TPP AEC CAFTA FTAAP
18 Connectivity Regional Infrastructure GMS economic corridors Belt and Road economic corridors
Connectivity Internet and Social Media Unique mobile subscriber growth in Asia Pacific 19 Source: The Mobile Economy Asia Pacific 2015, GSMA
20 Productivity Population Premium Country 2015 Population ( 000) % Population Aged 60 or Above 2015 2030 2050 Japan 126,573 32.1% 37.3% 42.5% South Korea 50,293 18.5% 31.4% 41.5% Malaysia 30,331 9.2% 14.4% 23.6% Thailand 67,959 15.8% 26.9% 37.1% Philippines 100,699 7.3% 10.3% 14.0% Indonesia 257,564 8.2% 13.2% 19.2% Vietnam 93,448 10.3% 17.5% 27.9% Myanmar 53,897 8.9% 13.2% 19.4% China 1,376,049 15.2% 25.3% 36.5% India 1,311,051 8.9% 12.5% 19.4% Source: UN World Population Prospects, the 2015 revision
21 Productivity Technology and Education Ranking in terms of pay and productivity according to the Global Competitiveness Report China India Malaysia Thailand Philippines Indonesia Vietnam 2010 15 61 6 29 82 20 4 2015 20 47 5 53 19 33 45 Move up the value chain and shift the smile curve upward by upgrading
22 Sustainability Extreme weather Water scarcity Pollution