Leading economists and analysts said yesterday they were largely upbeat about the prospects for China continuing to show strong growth and for Japan's economic recovery to continue this year, while raising questions about the economies of Europe and the US.
At a panel discussion on the opening day of the World Economic Forum annual meeting, Takatoshi Ito, professor of the Graduate School of Economics and Public Policy, said by current estimates Japan's GDP grew by 3 percent last year, with the economy now at "cruising speed" for further growth this year.
"All in all I'm very optimistic," Ito said of Japan's prospects, saying that this year GDP growth is projected to range between 1.5 and 2.0 percent.
Even more rapid will be China's growth, he predicted. After 9.5 percent last year, the Chinese economy is foreseen growing by about the same rate this year, Ito said.
"There is no stopping this giant," he said.
"This is reminiscent of the Japanese economy of the 1950s."
Others on the panel largely shared these views. Stephen Roach, chief economist for the Morgan Stanley bank, said "I'm optimistic about China and I'm optimistic on India ... and hopeful for an upturn in Japan."
Jacob Frenkel, vice chairman of the insurance concern American International Group added: "I share the optimism about China."
He said Beijing is doing everything to keep the economy expanding in order to maintain the growth in jobs. While being upbeat about the Asian region, in the review of the global economy, the panelists were less certain about Europe and the US.
"There are problems and risks for the US economy," Frenkel said, listing the huge current accounts and budget deficits.
"I am not concerned about the fact that it is not being dealt with," he said.
Frenkel also said that in order to help address the imbalances in the global economy, Europe should show more growth, "but his is not happening ... Europe is still a rigid continent."
Laura Tyson, dean of the London Business School, agreed that the EU countries have fallen short of their long-term 3 percent annual growth goal set down in the "Lisbon Declaration" in early 2000. This year, depending on oil price and currency rate developments, the EU region may rise by 2 percent to 2.2 percent, she predicted.
But she said there were some "positive" signs coming from Europe, particularly in such core economies as Germany and France, in terms of more flexibility in labor market regulations and reforms undertaken in social welfare and unemployment benefits.
"This has been driven by necessity," she said in noting the competition for jobs and investment posed by the newer EU members in Central and Eastern Europe. "There really has been a boost given to flexibility," she said in commenting on Germany's reforms.
Frenkel said the global economy is one now in which there are "new centers of gravity" where economies have shown great progress and are becoming interesting to investors. He specifically mentioned Turkey, Brazil, Russia and Mexico.