Evolution of Value Added Chains in Asia Pacific Region and Opportunities for Russia

Abstract

This paper examines the changing patterns of transnational value chains in the Asia-Pacific region. The methodology is based on the analysis of data extracted from the OECD – WTO Trade in Value Added Database (2016). The study demonstrates that 1) Asia-Pacific countries show extremely high involvement in the global value chains; 2) intra-Asian value chains develop at a fast pace, reflecting the trend towards regiona-lization of economic ties in Asia-Pacific (caused by the processes of transformation within China, the growing income divergence in the region and the development of regional integration mechanisms); 3) the level of participation in global value chains differs across countries and is subject to constant changes. In particular, Chinese manufacturers are moving to the processes with higher value added, and the role of an ‘assembly shop’ in the region is shifting to the ASEAN countries. Russia’s participation in the value chains in the Asia-Pacific region is currently limited to its role as a supplier of raw materials. High tariffs make manufacturing oriented towards Asia less viable, especially considering that most of Asia-Pacific countries have free trade agreements with each other. However, favorable rules of origin in Asian RTAs as well as good political relations with leading Asian countries in conditions of tensions between them still create some opportunities for involving Russia in regional value chains at the more advanced stages

Keywords

• value chains
• international integration
• international trade
• Asia-Pacific region
• Russia