Strength Through Diversification: Opportunities across Asia Pacific

GROWTH OF ASIA PACIFIC

The Asia Pacific region has established itself as “the factory of the world” , with a significant role being played by mainland China which accounts for almost 15% of global exports [1] , has trade links with over 200 markets globally [2] and is the top trade partner to more than 120 of them [3] . However, trade routes within the region will become more important.

Europe and North America have long been the largest trading partners with Asia Pacific, respectively accounting for 16% and 15% of exports by value in 2022 [4] . However, while the dollar value has increased, the proportionate share of exports has decreased from 19% and 23% respectively in 2002. Both Europe and North America do and will remain significant partners, but their dominance is lessening. This is expected to continue into the future as consumption growth in these regions lag faster developing markets and the prevalence of near-shoring is gathering pace. In contrast, intra-regional trade across Asia Pacific’s top 13 economies has increased from USD820bn in 2000 to over USD4.4tn in 2022 – a five-fold increase (Figure 1) – with intra-regional trade accounting for approximately half of total export trade for these markets. Beyond this, modest increases in trade are occurring with the Middle East and Africa.

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DRIVERS OF CHANGE IN ASIA PACIFIC