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- 2019.9
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The Asian share in world value added in exports and imports increased substantially between 1995 and 2015. The share of trade in intermediate goods has been dominant in Asia compared to those of Europe, America, and the rest of the world. The deeper trade agreements have boosted up global value chains because the international trade in global value chains was regional rather than multilateral. When we analyzed the World Bank database on the content of preferential trade agreements, however, the regional trade agreements in Asia did not turn out to be as deep as those in America and Europe.
Deeper regional integration contributes to the organization of global value chains along the regional clusters. In addition, Asia centered around China turns out to import more intermediate goods than Europe and America because it assembles the parts and components to export the final goods to foreign countries. In particular, the so-called Factory Asia is much closer to a network rather than the hub-and-spoke pattern observed in Factory North America and Factory Europe, as Baldwin and Lopez-Gonzalez (2015) claims.
Therefore Asian value chains are exposed to more serious risk sources. One of the implications of rising global val-ue chains for Asian economic development is that they need to be resilient against shocks from risk sources including natural disruptions because there is a potential for these shocks to propagate throughout the region.
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