Dynamics of economy-wideresource flowand consumption in China, South Korea, and Vietnam-a pan-regional analysis.

Abstract

The transformation of natural resources across the economy in China, South Korea, and Vietnam has been studied to give a comparative regional perspective based on trends in resource efficiency, bilateral trade dynamics, and progress onregional economic and environmental policy. Consumption of raw materials has been decomposed into economic dynamics and dematerialization, if any, has been testedbased on material flow accountingapproaches. As per the results, domestic material consumption (DMC) continues to increase in China and Vietnam but has stabilized in South Korea. China and South Korea havebecome main net importers of raw materials while Vietnam is about to enter this phase. With relatively lower material efficiency in China and Vietnam compared to South Korea, a higher reliance on intensive production and export of raw materials has been identified. As DMC has soared in all three countries, economic affluence is seen as the main driver with marginal contribution from population growth. However, technological improvements have helped reduce material usage with SouthKorea and China making significant progress. As SouthKorea has begun to dematerialize, China and Vietnam face the strong challenge ofdematerializing economic growth-a reversal that could take several years if resource productivity is not significantly improved. Factors that inhibit better resource efficiency in China and Vietnam include the production and trade of low-end items, energy, and raw materials. However, the increasing economic affluence in China and Vietnam has brought significant environmental improvements from both institutional and technological perspectives-through multiple policy actions. Moreover, as more countries import net resources, regional and global supply chain competition is expected to intensify-making resource efficiency a fundamental economic objective. The results of this study provide important lessons for emerging economies to accelerate resource productivity and reduce the physical intensity of materialsfor sustainable economic development.