Where is the Pacific Rim Region?

The Pacific Rim Region is a vibrant and dynamic economic and geographic area comprising over 48 percent of world trade, 58 percent of world GDP, and approximately 44 percent of the world’s population.

In terms of investment, trade, and economic development activity, the Pacific Rim Region is the leading area in the world for investment and trade opportunities for the forseeable future.

pacific rim map

View larger map

The Geography - The Pacific Rim Region

Consisting of 47 members, the Pacific Rim Region includes 44 independent nations along with Hong Kong, New Caledonia, and French Polynesia. Independent nations, and other resourceful economic entities which abut, or are adjacent to the Pacific Ocean are defined as the Pacific Rim Region.

To best evaluate this large economic and geographic region, the Pacific Rim Region is divided into four areas using the Equator and the International Date Line as shown above in the Pacific Rim Region map. Using the Equator and the International Date Line as our axis, each of the four areas are referred to as Quarters and represent the directional aspects of a compass rose: the Northwest Quarter, the Southwest Quarter, the Southeast Quarter, and the Northeast Quarter.

These Quarter designations are only used to conceptually analyze an immense, economically viable region instead of creating surmountable boundaries laden with social and/or economic implications.

Given the size and diversity of the Pacific Rim Region, we’ve identified a predominant economy in each Quarter to better evaluate this area economically.

Within each Pacific Rim Region Quarter, a predominant economy is identified with respect to leading economic output figures and international trade activity. Since output figures and international trade activity usually reflect fundamental economic activity and economic development, to some degree, these economic indicators seem appropriate when classifying a predominant economy for each of the four Quarters.

Presented in a counter-clockwise direction, Japan represents the predominant economy in the Northwest Quarter. Australia, Chile, and the United States are the predominant economies in the Southwest, Southeast, and Northeast Quarters, respectively.

Overview – Investment and Trade

Since 1982, trans-Pacific trade continues to exceed trans-Atlantic trade. In 2006, Pacific Rim Region exports accounted for 43% of world exports as compared to 34% of Atlantic-based exports.

Investment flows in the Pacific Rim Region are equally as impressive. In 2006, the most current aggregate figures available, the Pacific Rim Region accounted for $167 billion, or 30% of net capital inflows to developing countries. According to Global Development Finance 2007, these capital inflows shifted from debt and foreign direct investment (FDI) to portfolio equity amounting to $48 billion. Due to IPOs in China in 2006, primarily by the Industrial and Commerce Bank of China and the Bank of China, the transactions valued at $21.7 billion are more indicative of New York and London than Hong Kong.

From developing countries and newly industrializing economies, to industrial countries, the Pacific Rim Region is home to a burgeoning and diversified investment climate since the 1970’s.

Countries included in this investment and export-led growth trend are Japan, The Four Tigers and China. Japan is one of the top three wealthiest nations in the world today and is a leading global exporter and importer. “The Four Tigers”, or “The Four Dragons” — Singapore, South Korea, Taiwan, and Hong Kong — are also evidence of this profitable investment trend along with Malaysia, Indonesia, and Thailand.

China is another burgeoning Pacific Rim Region economy which experienced sustained average growth of over 9.5 percent since 1981. With market-oriented reforms over the past two decades, only a third of China’s $2.26 trillion economy (approximately one-seventh the size of the U.S. economy) is now directly state-controlled.

Included in this remarkable Pacific Rim Region investment and trade trend is Mexico along with other Pacific Rim Region, Latin American economies. Mexico is currently ranked among the world’s ten largest global producers. Chile has evolved into a regional economic force along with favorable investment stability in Panama and Costa Rica.

Clearly, each country is unique in their economic development and economic growth. Each country is beset with their own challenges along with managing fiscal responsibility, trade liberalization, privatization, and the rule of law.

At the Pacific Rim Institute, we’ll provide you with the practical management tools to effectively navigate through the diverse Pacific Rim markets and profit from the Pacific Rim Region’s trade and investment trends specific to your business interests.