Expect the unexpected in 2017. The diverse Asia Pacific region enters 2017 with positive momentum.
In contrast to the winds of political change in the West, major countries in Asia Pacific are much less likely to be buffeted by drastic shifts in political leadership. Structural reform needs to occur at a faster pace in a number of countries, but a major roadblock in 2017 is unlikely. In China and Japan, the two largest countries of the region, Chairman Xi Jinping and Prime Minister Shinzo Abe both govern on strong political bases.
The growing economic integration among Asia Pacific economies has spurred the growth of intra-regional trade, business, tourism, and capital flows. Asia Pacific countries have been trading more within the region than outside of it since the Global Financial Crisis. China is now a far more important trading partner for most Asia Pacific countries than the US or EU. Compared to 12 months ago, the immediate threat of a China hard landing is low. As a result, intra-regional integration could help to dampen potential shocks from the West. The region is projected to enjoy higher growth rates than the West.