This policy paper attempts to provide an analytical framework, and carries out an empirical assessment of the recent patterns of growth, trade and investment flows in Asia with a special emphasis on China and India. The study argues that the trade structure of countries in Asia is undergoing a change with the emergence of China and India as major economic powers, and that neighbouring countries are likely to face opportunities and/or challenges, depending on their current industrial structure.

While examining the current import patterns of China and India, the Policy Paper has highlighted that countries which export highly sophisticated products are more likely to benefit from the growth dynamism in these two countries, and there may not be significant opportunities for countries whose exports comprise of low value added products.