Asian trade and investment: Patterns and trends

The aim of this chapter is to present an analytical interpretation of trade and investment patterns in Asia, in the context of three general conditioning factors: rapid growth and structural change, host country commercial policy environments, and institutional and technological factors governing global trade and investment. A key theme running through this chapter is the implications of the ongoing process of international production fragmentation1 – the geographic separation of activities involved in producing a good (or service) across two or more countries – for the debate on regional versus global economic integration of these countries. Among other issues canvassed, we also comment on the debate as to whether the emergence of China as the world’s fastest growing industrial economy will crowd out other countries’ opportunities for integrating into the regional and global economy through fragmentation-based specialization.