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. Although structural reform needs to occur at a faster pace in a number of countries, a major roadblock in 2017 is unlikely. In the two largest countries of the region, China’s President Xi Jinping and Japan’s 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 United States or European Union (see “Share of total trade volume”, page 29). The immediate threat of a hard lan