Intra-Regional Trade in East Asia: The Decoupling Fallacy, Crisis, and Policy Challenges
AbstractThis paper examines the export experience of East Asian economies in the aftermaths of the global financial crisis against the backdrop of pre-crisis trade patterns. The analysis is motivated by the ‘decoupling’ thesis, which was a popular theme in the Asian policy circles in the lead-up to the onset of the recent financial crisis, and aims to probe three key issues: Was the East Asian trade integration story that underpinned the decoupling thesis simply a statistical artifact or the massive export contraction caused by an overreaction of traders to the global economic crisis and/or by the drying up of trade credit, which overpowered the cushion provided by intra-regional trade? What are the new policy challenges faced by the East Asian economies? Is there room for an integrated policy response that marks a clear departure from the pre-crisis policy stance favoring export-oriented growth? The findings caution against a possible policy backlash against openness to foreign trade arising from the new-found enthusiasm for rebalancing growth, and make a strong case for a long-term commitment to non-discriminatory multilateral and unilateral trade liberalization.
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Bibliographic InfoPaper provided by The Australian National University, Arndt-Corden Department of Economics in its series Departmental Working Papers with number 2009-09.
Length: 62 pages
Date of creation: 2009
Date of revision:
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production networks; trade patterns; global financial crisis;
Other versions of this item:
- Athukorala, Prema-chandra & Kohpaiboon, Archanun, 2009. "Intra-Regional Trade in East Asia: The Decoupling Fallacy, Crisis, and Policy Challenges," ADBI Working Papers 177, Asian Development Bank Institute.
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- F15 - International Economics - - Trade - - - Economic Integration
- F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-05 (All new papers)
- NEP-INT-2009-09-05 (International Trade)
- NEP-MAC-2009-09-05 (Macroeconomics)
- NEP-SEA-2009-09-05 (South East Asia)
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