Chinese policies good for Asian economic growth

Asian nations must seize opportunities offered by China’s growing economic importance to regear their economies to ensure they are not left behind experts said recently.

The region must move fast to adjust its policies to China’s emergence as possibly the world’s third largest economic powerhouse after the United States and Japan, they told the World Economic Forum’s East Asia Economic Summit. Singapore’s Senior Minister of State for trade and education Tharman Shanmugarantnam said, Asia’s response to China’s presence over the next five years would determine whether it would be marginalized and face an economic slowdown or enjoy high growth."

He said plans by the Association of Southeast Asian Nations (ASEAN) to create the world’s biggest free trade zone with China in 10 years offered the biggest future opportunity. According to Chinese official estimates, he said, every one billion dollars of Chinese exports required some 500 million dollars in imports of raw materials.

The eventual removal of trade barriers following China’s entry into the World Trade Organisation (WTO) last year, its economic diversification and low production costs also are promising features. "There are opportunities for us but nothing is given. China is not a given opportunity or a given threat. It all depends on how we respond," he said on the final day of the summit.

China's economy to grow by at least 7.8%

China’s economy will grow by 7.8 percent or more this year, state media reported recently a government think tank as saying.

The Chinese Academy of Social Sciences made the prediction in a report issued, the Economic Information Daily said.

The academy attributed the growing economy to the government’s fiscal policies and to the continuing expansion in domestic demand.

Foreign trade has also greatly increased, as has actual foreign direct investment.

The academy predicted that in 2003, barring any unexpected international or domestic events or serious natural disasters, the economy would continue to grow at a rate of 7 percent or higher.

China’s economy grew 7.8 percent in the first half of 2002, compared with the same period last year. The economy grew by 7.3 percent last year.

Chinese officials have expressed increasing confidence in recent months that economic growth will exceed the government’s seven percent target this year because of massive state spending and rising exports.

The central bank in a recent report said this year’s growth may top 7.5 percent, while some state researchers are even more bullish, expecting a 7.7 percent rise.

Japan's economy policy praised

The United States recently praised the commitment and determination of Japanese Prime Minister Junichiro Koizumi as his government struggles to reignite an economy which once powered Asia’s explosive growth.

In an unusual move, State Department spokesman Richard Boucher issued a statement reflecting US satisfaction at recent moves to address the crisis in Japan’s debt-laden banks and the expanded portfolio of new finance policy chief Heizo Takenaka.

Boucher said that Washington welcomed the "commitment and determination the Koizumi administration has shown to seriously address Japan’s economic problems," Boucher said.

Economy still recovering : Japan

Japan recently left its key economic assessment unchanged in October, but warned a slump in Tokyo stocks and concerns over the US economy cast a shadow over the fragile recovery.

In its monthly report of the economy, the government maintained its assessment for the third consecutive month, saying signs of a "moderate" recovery were observed in some areas.

But the pace of recovery was slowing and the future of the economy remained uncertain, the government said in the report, largely regarded as a verdict on current conditions of the nation’s economy.

"Though we maintained the overall economic assessment, the result was mixed in a tug-of-war between upgrades and downgrades in different areas of the economy," a government official said.

"The economic environment has become more severe than in the previous month thanks to the continued weakness in the domestic stock market and concerns over the US economy, which weighs heavily on the recovery in final demand in Japan," the official conceded.

Japan's trade surplus triples

Japan’s trade surplus with the rest of Asia more than trebled in August, thanks to healthy demand for Japanese steel products, semiconductors and electronic parts, the finance ministry said recently.

Japan’s surplus with the region rose 335.8 percent from a year ago to 382.0 billion yen, increasing for the sixth straight month. Exports soared 17.3 percent to 1,850.7 billion yen while imports sank 1.4 percent to 1,468.7 billion yen.

"Asian demand remained strong. The rise of Asia-bound exports helped expand Japan’s overall exports figure," said Junji Ota, economist at Okasan Research Institute.

Thai economy grows by 5.1

Thailand’s resurgent economy grew 5.1 percent in the second quarter from a year earlier, prompting the government’s economic advisory body recently to lift its full year forecast to up to 4.5 percent.

The National Economic Social Development Board (NESDB) shrugged off the possible impact of rising crude oil prices to revise its gross domestic product (GDP) forecast for 2002 to 4.0-4.5 percent compared with the previous estimate of 3.5-4.0 percent.

Singapore corners 65% of ASEAN's FDI

Singapore took in 65 percent of the $13 billion of foreign direct investment (FDI) in Southeast Asia last year, trade minister George Yeo said recently.

The Association of Southeast Asian Nations (ASEAN) secretariat recently announced FDI in the 10 member regional bloc rose by 13.4 percent to $13.06 billion in 2001.

The Association of Southeast Asian Nations (ASEAN) secretariat recently announced FDI in the 10 member regional bloc rose by 13.4 percent to $13.06 billion in 2001.

Speaking in parliament, Yeo said: "Singapore attracted $8.6 billion or 65 percent of the total FDI into ASEAN."

There was no breakdown on where the rest of the investments went, but there have been concerns in ASEAN that the group’s newer and less prosperious members are missing out on the FDI inflows, prompting calls to narrow the development gap.

ASEAN groups 10 nations ranging from Cambodia, Laos, Myanmar and Vietnam to high-tech Singaproe, oil-rich Brunei and other more development member Indonesia, Malaysia, the Philippines and Thailand.

The first four countries are relatively newer members of ASEAN, which has also been losing out investments to emerging power house China. Yeo said fixed asset investments in Singapore’s key manufacturing sector totaled $5.12 billion last year, with a further 1.8 billion last year, with a further 1.8 billion in services sector.