Asia’s role in global value production chains expanding: ADB report

Asia’s role in global value production chains and as a source of and destination for domestic value-added in exports has been expanding, according to an annual statistical report released by the Asian Development Bank (ADB).

The report, Key Indicators for Asia and the Pacific 2019, said domestic value-added via forward linkages (DVA_F) generated in Asia went up from 23 percent of the world’s total in 2000 to 30.2 percent in 2018.

It also underscored the increasing share of world DVA_F absorbed by Asia from 19.7 percent in 2000 to 26 percent by 2018.

“Comparing Asia’s share in world DVA_F generation against its share in world DVA_F absorption, it can be said that the region plays a larger role as an exporter of domestic value-added than as an importer of value-added,” it said.

The report pointed out that intraregional trade remains important for Asia, especially as its dependence on North America, comprising the United States and Canada, as a trade partner appears to be diminishing.

Up to 33.5 percent of domestic value-added generated in Asia stayed within the region in 2018, while 39.0 percent of total domestic value-added absorbed in Asia originated from within the region, it said.

“The changing dynamics and patterns of intraregional DVA_F flows can vary by sector, but the growth of the PRC as a source and the persistence of Southeast Asia plus Fiji as a major destination is evident across all five sectors assessed here,” it said.

These include the primary sector, low-technology industrial sector, medium- to high-technology industrial sector, business services sectors, and personal and public services sector.

Southeast Asia plus Fiji became the top destination for primary sector intraregional domestic value-added in 2018, with the PRC being its major source.

In the low-technology industrial sector, Southeast Asia plus Fiji had replaced Japan as the region’s largest by 2018 in terms of destinations for intraregional domestic value-added.

The PRC and Southeast Asia plus Fiji were the largest sources of intraregional domestic value added in 2018, replacing Japan and East Asia, in the business services sectors.

Southeast Asia includes Brunei Darussalam, Cambodia, Indonesia, the Lao People’s Democratic Republic, Malaysia, the Philippines, Singapore, Thailand, and Viet Nam.

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