ASIAN ECONOMIC INTEGRATION REPORT 2021 ASIAN …

1 ASIAN DEVELOPMENT BANKA sian ECONOMIC INTEGRATION REPORT 2021 Making Digital Platforms Work for Asia and the PacificThe coronavirus disease (COVID-19) pandemic disrupted both supply and demand sides of an interconnected world economy in 2020. Asia and the Pacific was not immune as lockdowns and travel and trade restrictions affected nearly all aspects of cross-border ECONOMIC activity. This publication examines the initial impact on trade, investment, finance, and people s mobility across the region as the pandemic struck. It looks at how regional economies individually or collectively respond to the crisis by, for example, leveraging rapid technological progress and digitalization as well as increasing services trade to reconnect and recover.

2 The theme chapter focuses on digital platforms and how they can accelerate digital transformation across the the ASIAN Development BankADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members 49 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical Digital PlatforMs Work for asia anD tHE PaCifiCfEBrUarY 2021 ASIAN ECONOMICINTEGRATIONREPORT 2021 ASIAN ECONOMIC INTEGRATION REPORT 2021 Making Digital Platforms Work for Asia and the PacificAsiAn Development BAnk6 ADB Avenue, Mandaluyong City1550 Metro Manila.

3 DEVELOPMENT BANKM aking Digital PlatforMs Work for asia anD tHE PaCifiCfEBrUarY 2021 ASIAN ECONOMICINTEGRATIONREPORT 2021 Creative Commons attribution igo license (CC BY igo) 2021 ASIAN Development Bank6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, PhilippinesTel +63 2 8632 4444; Fax +63 2 8636 rights reserved. Published in 2021. ISBN 978-92-9262-715-7 (print); 978-92-9262-716-4 (electronic); 978-92-9262-717-1 (ebook)Publication Stock No. TCS210048-2 DOI: views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the ASIAN Development Bank (ADB) or its Board of Governors or the governments they represent.

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6 Korea as the Republic of Korea; and Vietnam as Viet Nam. Cover design by Erickson Mercado. Printed on recycled paperiiiTables, Figures, and Boxes vForeword xiAcknowledgments

7 XiiDefinitions xivAbbreviations xvHighlights xvii1.

8 Managing globalization and Regional INTEGRATION Post-CoVid-19 1 References 112. tRade and the global Value Chains: the Challenging tRade enViRonMent and Changing global Value Chain landsCaPe 12 Recent Trends in Asia s Trade 12 Asia s Intraregional Trade

9 17 Progress of Global and Regional Value Chains 18 The Impact of GVC Reshoring 22 Updates on Regional Trade Policy 25 References 38 Annex 2a: Analytical Framework of GVC and RVC 40 Annex 2b.

10 GVC Diversification Backward Linkages 413. CRoss-boRdeR inVestMent: Riding the PandeMiC tide in CRoss-boRdeR inVestMent 45 Updates on Foreign Direct Investment During the COVID-19 Pandemic 45 Policy Updates: Regulatory Restrictions and Screening in Foreign Direct Investments 52 Bilateral Investment Treaties and Foreign Direct Investment 56 References