Asia and Pacific
Asia and Pacific: Building on Asia's Strengths during Turbulent Times
May 2016
[$token_name="PublicationDisclaimer"]
Reports and Related Links:
Growth in the Asia-Pacific economies is expected to decelerate slightly to about 5.3 percent during 2016–17, according to the latest Regional Economic Outlook for Asia and Pacific, published on May 3, 2016. While Asia remains the engine of the global economy, the moderation in regional growth reflects the sluggish global recovery and slowing global trade. As external demand remains relatively subdued and global financial conditions have started to tighten, domestic demand is expected to be a major driver of activity across most of the region. The report finds that policy settings are appropriate across most of the region, but implementing structural reforms is critical to bolstering potential growth and reducing potential vulnerabilities. The report also covers China’s spillovers to Asia, implications of China’s rebalancing for trade, and inequality in the region.
Contents
Front Matter
Chapter 1. Building on Asia’s Strengths during Turbulent Times
- Recent Developments and Near-Term Outlook
- Risks to the Outlook: Downside Risks are Looming Large
- Policy Recommendations
Chapter 2. Navigating the Transition: Trade and Financial Spillovers from China
- Introduction and Main Findings
- Channels of Spillovers from China’s Growth Slowdown
- Trade Spillovers from China’s Rebalancing
- China’s Financial Spillovers to Regional Markets
- Policy Implications
- Annexes
Chapter 3. China’s Evolving Trade with Advanced Upstream Economies and Commodity Exporters
- Introduction and Main Findings
- Conclusion
- Annex
Chapter 4. Sharing the Growth Dividend: Analysis of Inequality in Asia
- Introduction and Main Findings
- Recent Trends and Developments
- Drivers of Income Inequality
- Conclusions and Policy
- Annex
References
Boxes
| Chart | Data | 1.1 | Housing Sector Developments in Australia and New Zealand: Diverging Tales |
| Chart | Data | 1.2 | Household Debt in Korea: The Role of Structural Factors and Rising House Prices |
| Chart | Data | 1.3 | U.S. Monetary Policy Uncertainty: What Have Been Its Effects on Asian Currencies? |
| Chart | Data | 1.4 | Japan’s Sluggish Wages: Causes and Remedies |
| Chart | Data | 1.5 | Paris Agreement on Climate Change and Asia-Pacific Countries |
| Chart | Data | 1.6 | Cyclone Winston in Fiji |
| Chart | Data | 1.7 | Rise in Services Trade: Looking Beyond Cross-Border Services |
| Chart | Data | 2.1 | Regional Consequences of a Growth Slowdown in China |
| Chart | Data | 2.2 | China’s Import Slowdown |
| Chart | Data | 2.3 | China Opening Up: The Evolution of Financial Linkages |
| Chart | Data | 3.1 | The Evolution of China’s Labor-Intensive Exports |
| Chart | Data | 3.2 | Food Consumption Patterns in China |
| Chart | Data | 3.3 | The Contribution of China’s Growth Transition to Commodity Price Declines |
| Chart | Data | 4.1 | Understanding Rising Inequality in China and India |
| Chart | Data | 4.2 | What Explains Declining Inequality in Malaysia, the Philippines, and Thailand? |
| Chart | Data | 4.3 | Labor Share and Income Inequality |
Tables
| 1.1 | Asia: Real GDP | ||
| 1.2 | Asia: General Government Balances | ||
| 1.3 | Asia: Current Account Balance | ||
| 1.4 | Asia: Consumer Prices | ||
| 3.1 | World Consumption of Selected Major Commodities, 2011–15 |
Figures
| Chart | Data | 1.1 | United States: Financial Conditions |
| Chart | Data | 1.2 | Global Commodity Prices |
| Chart | Data | 1.3 | Market Volatility |
| Chart | Data | 1.4 | Asia: Cumulative Portfolio Flows |
| Chart | Data | 1.5 | Asia: Equity Prices and Price-to-Earnings (PE) Ratios |
| Chart | Data | 1.6 | Asia: Ten-Year Sovereign Bond Yields: Change since End-June 2015 |
| Chart | Data | 1.7 | Sovereign Credit Default Swap Spreads |
| Chart | Data | 1.8 | Selected Asia: Exchange Rates |
| Chart | Data | 1.9 | Selected Asia: Foreign Exchange Reserve Accumulation |
| Chart | Data | 1.10 | Selected Asia: Real Private Sector Credit Growth |
| Chart | Data | 1.11 | Asia: Nonfinancial Corporate Sector Debt Issuance |
| Chart | Data | 1.12 | Consolidated Foreign Claims |
| Chart | Data | 1.13 | Asia: Financial Stability Heat Map |
| Chart | Data | 1.14 | Ratio of Regulatory Tier 1 Capital to Risk-Weighted Assets |
| Chart | Data | 1.15 | Return on Assets |
| Chart | Data | 1.16 | Ratio of Nonperforming Loans to Total Gross Loans |
| Chart | Data | 1.17 | Asia: Changes in Real GDP at Market Prices |
| Chart | Data | 1.18 | Selected Asia: Exports to Major Destinations |
| Chart | Data | 1.19 | Selected Asia: Retail Sales Volumes |
| Chart | Data | 1.20 | Asia: Headline Inflation and Expectations |
| Chart | Data | 1.21 | Selected Asia: Core Inflation |
| Chart | Data | 1.22 | Asia: Current Account Balances |
| Chart | Data | 1.23 | Selected Asia: Contributions to Projected Growth |
| Chart | Data | 1.24 | Indicator Model for Asia: Projected versus Actual Real GDP Growth |
| Chart | Data | 1.25 | Gordon Equity Price Model for Asia: Projected versus Actual Real GDP Growth |
| Chart | Data | 1.26 | Asia: Output Gap versus Credit Gap |
| Chart | Data | 1.27 | Selected Asia: Real Policy Rates |
| Chart | Data | 1.28 | Estimated Central Bank Reaction Functions |
| Chart | Data | 1.29 | Selected Asia: Cyclically Adjusted Fiscal Balance |
| Chart | Data | 1.30 | China: Economic Activity Indicators |
| Chart | Data | 1.31 | China: Daily Exchange Rate |
| Chart | Data | 1.32 | China: Three-Month Implied Currency Volatility and Risk Reversal |
| Chart | Data | 1.33 | United States: Interest Rates |
| Chart | Data | 1.34 | Japan: Equity Prices and Exchange Rate |
| Chart | Data | 1.35 | Low-Income Economies: Current Account and Fiscal Balances |
| Chart | Data | 1.36 | Natural Disaster Risks: World Risk Index, 2014, Top 16 |
| Chart | Data | 1.37 | Asia: Resistance Index |
| Chart | Data | 1.38 | Asia: Exchange Market Pressure Index (EMPI) |
| Chart | Data | 2.1 | China’s Role in the Global Economy |
| Chart | Data | 2.2 | Recent Developments in Global Trade and Asian Financial Markets |
| Chart | Data | 2.3 | Channels of Spillovers from a Slowdown in China |
| Chart | Data | 2.4 | Share of Domestic Value Added Exported from China’s Final Demand |
| Chart | Data | 2.5 | A Tale of Two Exporters to China, 1995–2011 |
| Chart | Data | 2.6 | Change in Value-Added Exports to China after China’s Rebalancing |
| Chart | Data | 2.7 | Estimated Impact of China Rebalancing on Partner-Country Growth Transmitted Through the Trade Channel |
| Chart | Data | 2.8 | Impact of Historical Rebalancing on GDP Growth |
| Chart | Data | 2.9 | Impact on GDP Growth Over the Medium Term: By Region |
| Chart | Data | 2.10 | Asian Market Correlations with China, Japan, and the United States |
| Chart | Data | 2.11 | Asia: Business Cycle Synchronization with China |
| Chart | Data | 2.12 | Regional Equity and Foreign Exchange Markets during China-Related Shocks |
| Chart | Data | 2.13 | Event Study: Stock Market Movements Due to Shocks from China |
| Chart | Data | 2.14 | Event Study: Stock Market Movements Due to Shocks from China, by Trade Links with China |
| Chart | Data | 2.15 | Event Study: Exchange Rate Movements Due to Shocks from China |
| Chart | Data | 2.16 | Event Study: Exchange Rate Movements Due to Shocks from china, by Trade Links with China |
| Chart | Data | 2.17 | Equity Market Spillover |
| Chart | Data | 2.18 | Determinants of Market Sensitivity to China and Japan |
| Chart | Data | 2.19 | Contribution to Explained Variance in Market Sensitivities to China |
| Chart | Data | 2.20 | Scenario Analysis: Transmission of Shocks |
| Chart | Data | 2.21 | Asian Market Sensitivity to China under Different Scenarios |
| Chart | Data | 3.1 | Import Intensity of GDP Components, 2011 |
| Chart | Data | 3.2 | Consumption Imports |
| Chart | Data | 3.3 | China: Consumption Imports |
| Chart | Data | 3.4 | Real Commodity Import Growth |
| Chart | Data | 3.5 | Domestic Value Added in Exports |
| Chart | Data | 3.6 | Processing Trade |
| Chart | Data | 3.7 | Import Intensity |
| Chart | Data | 3.8 | Exports of LCD Screens and Transistors |
| Chart | Data | 3.9 | Trade Balance with China by Technology Sophistication |
| Chart | Data | 3.10 | Trade Balance with China by End-Use Category |
| Chart | Data | 3.11 | China: Commodity Consumption and Production |
| Chart | Data | 3.12 | China: Deviations of Actual Consumption from Counterfactual |
| Chart | Data | 3.13 | Commodity Production in China: Deviation of Actual from Counterfactual |
| Chart | Data | 3.14 | China: Contribution to Changes in Net Commodity Imports, 2011–15 |
| Chart | Data | 3.15 | Commodity Exports to China from Latin America and Asia and China’s Import Volumes from Latin America and Asia |
| Chart | Data | 4.1 | World and Asia: Income Inequality |
| Chart | Data | 4.2 | World and Asia: Population Weighted Income Inequality |
| Chart | Data | 4.3 | Regional Comparison: Income Inequality Level |
| Chart | Data | 4.4 | Regional Comparison: Income Inequality Trend |
| Chart | Data | 4.5 | Asia: GDP per Capita and Net Gini Index |
| Chart | Data | 4.6 | Selected Asia: Net Gini Index |
| Chart | Data | 4.7 | Asia: Top 10 Income Share |
| Chart | Data | 4.8 | Selected Asia: Growth of Income Share by Decile |
| Chart | Data | 4.9 | Asia: Growth in Mean Income/Consumption by Decile |
| Chart | Data | 4.10 | Poverty in Asia |
| Chart | Data | 4.11 | Decomposition of Changes in Headcount Ratio |
| Chart | Data | 4.12 | The Middle Class in Asia |
| Chart | Data | 4.13 | Education by Wealth Quintile |
| Chart | Data | 4.14 | Health by Wealth Quintile |
| Chart | Data | 4.15 | Financial Services by Income Share in 2014 |
| Chart | Data | 4.16 | Nonregular Employment by Type in 2013 |
| Chart | Data | 4.17 | Nonagricultural Informal Employment |
| Chart | Data | 4.18 | Advanced versus Emerging Market and Developing Economies |
| Chart | Data | 4.19 | Asia: Financial Deepening |
| Chart | Data | 4.20 | Population with Bank Accounts in 2014 |
| Chart | Data | 4.21 | Asia: Fiscal Policy |
| Chart | Data | 4.22 | Composition of Social Spending |
| Chart | Data | 4.23 | Pension Receipt Rate |
| Chart | Data | 4.24 | Asia: Skill Premium |
| Chart | Data | 4.25 | Regional Comparison: Return to Schooling Rate |