Global Value Chains and Regional Connection: Asia’s Shifting Inter- and Intra-Regional Trade Linkages

Abstract

The global value chain (GVC) mainly concerns the geographic dispersion and integration of the production-consumption system in the contemporary world economy. However, little work has been done conceptually regarding the GVC’s relationship with macro-regions like Asia, or in conjunction with regionalization. To address the gap, this paper examines the regional connection and interaction within Asia and beyond from the lens of GVCs. It introduces a GVC understanding of the global economy and discusses how the macro-regional dynamics can be comprehended in the context of GVCs and various interactions of intra- and extra-regional firms. The study proposes an analytical framework for GVC configurations relative to inter-regional and intra-regional connections. The paper then examines the evolving nature of Asia's regional connection as the most dynamic region with contemporary GVCs. It specifically analyzes international trade networks in two GVC-intensive sectors, i.e., textile and apparel, and electronics, and highlights how inter- and intra-regional trade networks vary across sectors and product types and have changed over time. The study concludes by discussing Asia’s future regional connection amid post-pandemic uncertainties over GVCs.