Regional integration among emerging market economies complements global integration rather than substituting for it, which implies that strong regional ties act as buffers against global fragmentation.Emerging Asia is more integrated than other emerging market regions due to a higher share of manufacturing with complex supply chains and the presence of regional financial centres in Hong Kong SAR and Singapore.Trade and banking integration reinforce each other, and regional payment system integration has positive externalities by reducing the transaction costs of trade and enabling cross-border banking services.Tapping the significant potential for further regional integration requires concerted efforts on cross-border cooperation and the implementation of targeted trade and banking sector liberalisation policies.
