Question

Q. what is the linkages between trade, one of the main contributors to growth in Asia-pacific regions, and inclusive growth?

Answer 1

Asia's reemergence as manifested in its growing share of global economic power has drawn attention , especially within the region, to the possibility of the region decoupling its vulnerability from sharp impacts created by fluctuations in the business cycle in other parts of the world, particularly in North America. The rise of intra-regional trade within Asia's export profile has reinforced an increasing sense of self-reliance. At the same time , the increasing share of world trade in the region, the importance of trade for Asia 's growth and the close relation between globalization and the involvement of the country in geographically fragmented production chains are strengthening trade ties

Initially, foreign trade binds countries to pay for certain goods and services by the exchange of products and services and through the compensatory flow of money. Trade also connects countries to substitute or produce exchanged goods through transfers of capital goods. However, traded products and their manufacture often require the international extension of externalities such as knowledge transfer or effect on replacement or supplement demand. The terms of trade, exchange rates, and macroeconomic balances or growth rates can be influenced on the aggregate level.

The fast-growing Asian region and its potentially enormous economic power raise the hope that its own growing demand may help it both weather the adverse consequences of a US slowdown and ease the impact of a global downturn. At the same time, trade is increasing and becoming lighter; exports are expanding mainly with smaller shipments entering new markets; and fragmented production networks are becoming the norm. All these
Changes put a premium on speed , flexibility and information, thus increasing the potential for shock transmission among trading partners.