Linking South Asia with East Asia: Trends, Potential, and Policies

Pradumna B. Rana
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Pradumna B. Rana: Division of Economics, Nanyang Technological University, Singapore

No 804, Economic Growth Centre Working Paper Series from Nanyang Technological University, School of Social Sciences, Economic Growth Centre

Abstract: Recently, there has been growing interest in the evolving economic relationships between South Asia and East Asia. What could be the implications of the re-emergence of the two giant economies or hegemons – India and China - on the region and globally? Could these relationships be the second phase of Pan-Asian integration? Will Asia be as well-integrated as it was during the pre-colonial period? This paper finds that the level of economic integration between South Asia and East Asia, although increasing since 1990, started to surge after 2000, albeit from a low base, mainly because of growing interdependence between India and China. The level of integration is, however, low in relative terms. By calculating the usual indices, the paper finds that, although there are overlaps, there are also significant amounts of complementarities between the two regions on goods and service trade. The level of economic integration between the two regions is, therefore, bound to increase. The paper concludes by identifying a set of measures to enhance policy-led integration between the two regions including those seeking to reduce transportation costs.

Pages: 42 pages
Date: 2008-04
New Economics Papers: this item is included in nep-cwa, nep-dev, nep-int and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:nan:wpaper:0804

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