Asian Trade and Supply Chain Linkages

Abstract

This chapter begins with an overview of the impact of the Covid-19 pandemic on economies of Asia generally, before turning to its impact on supply chains specifically, using the medical equipment sector as a case study to illustrate the practical complexities. It then considers the pandemic’s implications for the multilateral trade system and its impact on Asian economic integration and regionalism. The pandemic has motivated attempts to increase robustness of supply chains through diversification away from excessive dependence on China and into Southeast and South Asia, in an incremental rather than revolutionary way; no wholesale departure from manufacturing in China is anticipated. For most countries, the most efficient response is to continue to rely on international trade and global production networks, while addressing the strategic concerns through improved emergency-preparedness stockpiles. The increased pressure for reshoring, however, is part of a larger disaffection with globalization and the erosion of the rules-based international trade system.