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Asia's contribution to global rebalancing

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  • Cyn‐Young Park
  • Charles Adams
  • Hoe Yun Jeong

Abstract

Developing Asia remains at the core of global payment imbalances. While the geographical concentration of current account imbalances is rather significant, with the People’s Republic of China accounting for the lion’s share of the region’s current account surplus, how Asia contributes to global rebalancing also depends critically on the NIEs and larger ASEAN economies. Given the region’s huge diversity, the necessary national macroeconomic and structural policies will vary significantly across Asia’s emerging economies. Whereas near-term rebalancing efforts will be driven primarily by macroeconomic and exchange rate policies, medium- to long-term measures will involve policies and structural reforms directed to boost domestic and regional demand as a source of economic growth. In this paper, we argue that regional rebalancing will depend critically on the adoption of deeper and more comprehensive structural reforms and further trade liberalization that promote domestic spending—thus reducing Asia’s high dependence on extra regional demand. Priority policies should include infrastructure spending, competition, trade, financial development, investment, immigration, and other social policies to reduce national savings.
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Suggested Citation

  • Cyn‐Young Park & Charles Adams & Hoe Yun Jeong, 2011. "Asia's contribution to global rebalancing," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 25(2), pages 38-51, November.
  • Handle: RePEc:bla:apacel:v:25:y:2011:i:2:p:38-51 DOI: j.1467-8411.2011.01310.x
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    File URL: http://hdl.handle.net/10.1111/j.1467-8411.2011.01310.x
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    References listed on IDEAS

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    1. Park, Cyn-Young & Majuca, Ruperto & Yap, Josef, 2010. "The 2008 Financial Crisis and Potential Output in Asia: Impact and Policy Implications," Working Papers on Regional Economic Integration 45, Asian Development Bank.
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    Cited by:

    1. Hong Bum Jang, 2011. "Financial Integration and Cooperation in East Asia: Assessment of Recent Developments and Their Implications," IMES Discussion Paper Series 11-E-05, Institute for Monetary and Economic Studies, Bank of Japan.
    2. Siow Yue Chia, 2013. "People’s Republic of China," Chapters,in: Asia Rising, chapter 11, pages 313-344 Edward Elgar Publishing.
    3. Chin, Gregory, 2012. "Responding to the Global Financial Crisis: The Evolution of Asian Regionalism and Economic Globalization," ADBI Working Papers 343, Asian Development Bank Institute.

    More about this item

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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