Key facts
- Asia's economic integration is being reconfigured toward greater resilience.
- Tariff nationalism, geopolitical tensions, and climate-related trade measures are reshaping production networks into more diversified, multi-hub, and risk-aware structures.
- Supply chains are increasingly reorganized within Asia.
- The PRC is becoming a more important regional source of final demand.
- Low utilization of existing FTAs reflects fragmented rules of origin, administrative burdens, and uneven domestic and institutional capacity across economies.
- Digital trade facilitation, interoperable payments, and decarbonization are emerging as core drivers, with green trade increasingly shaped by upstream supply chains, critical minerals, and value-chain coordination.
Asia is actively reshaping its trade and investment strategies to navigate a changing global landscape marked by geopolitical tensions and the escalating impacts of climate change. The region is moving towards more diversified, multi-hub production networks, aiming to reduce risk and build resilience.
According to the Asian Economic Integration Report 2023, smart trade and investment policies, alongside regulatory cooperation, are crucial for Asian economies to tackle climate change, recover from the pandemic, and foster sustainable development. The report highlights that while regional integration is predominantly production-centered, with intra-Asian trade driven by intermediate goods, the People's Republic of China (PRC) is increasingly becoming a significant regional source of final demand.