ABSTRACT
Introduction On a basic level, structural change refers to changes in the structure of the economy. The rise in the relative share of manufacturing is typically followed by a rise in the relative share of services as the manufacturing sector matures and the economy moves into a postindustrial phase. One Asia-wide structural change has been economic globalization, or growing integration into the global trade and financial systems. An indispensable core ingredient behind developing Asia’s remarkable economic success has been the explosive growth of trade with the rest of the world and with other countries within the region. Equally important to the region’s rapid growth has been the large inflows of foreign direct investment (FDI) and other foreign capital into the region. The region has now become a globally significant exporter of capital, and such capital outflows will benefit its growth. Another Asia-wide structural change is technological progress, which has steadily shifted the region’s technological level toward the global technology frontier.
