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East Asia’s Exposure to the Eurozone: More Than Meets the Eye?


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HIGHLIGHTS:

  • At first glance, most East Asian countries are only moderately sensitive to decreasing demand from the Eurozone
  • However, weak demand in Europe has a strong effect on Chinese exports, which depend on intermediate goods from other East Asian countries provided through a close-knit regional supply chain – leading to considerable indirect exposure
  • East Asian countries need to maintain competitiveness by moving up the value chain and undertaking reforms to improve the investment climate. They also need reforms to increase domestic demand and stimulate regional demand through deepening regional integration efforts.


About the series:

The Eye on East Asia and Pacific Notes are prepared by economists from the East Asia and Pacific Region of the World Bank drawing on completed or ongoing research and economic work. The notes, however, are not peer reviewed. They do not represent the official position of the World Bank Group.