Asia displayed remarkable resilience in the face of sluggish consumer spending this year in the US, its biggest export destination, and economists say it is set to reap the rewards next year.
The mix of a US turnaround and a rapidly accommodating China are seen as the right ingredients to bolster regional economies, although Japan shows little sign of emerging from its decade long slumber.
Asia's ability to absorb the fallout from an anaemic US economy and lay the groundwork for a significantly improved 2003 is credited largely to reforms forced upon Asia by the 1997 financial crisis.
"What we have is a lean Asia which does not have a lot to trim off," said Joseph Tan, an economist with Standard Chartered Bank.
With the US poised to turn on a stronger performance next year, export-oriented Asian countries stand to gain from a spurt in orders. Consumer spending accounts for about two-thirds of US economic activity.
"The foundations that most Asian countries have built after the 1997 crisis ... would have put Asia in good stead to capitalize on any acceleration in the US recovery," said Nizam Idris, a Singapore-based economist with IDEAglobal.
The US economy is projected to grow 2.6 percent next year from 2.4 percent this year which means the growth momentum is accelerating and "that will be good news for Asia," Idris said.
Add the red-hot Chinese economy to the equation and the horizon for Asia next year looks even brighter, according to economists.
"China remains a key driver of the region's economic activity," Standard Chartered Bank said in a report noting Beijing's ambition to quadruple the size of its economy over the next 20 years will have a positive spillover effect.
"Putting such a performance in context, a mere doubling in the size of the Chinese economy would be more than equivalent to adding two more Koreas to the size of the region's economy," it said.
But Bank of East Asia senior economist Paul Tang was somewhat pessimistic about the US performance next year.
"I don't see a strong recovery in the US, with consumer spending likely to slow and the recovery will be slow," Tang said, adding a US-led war in Iraq would accentuate these problems.
A report from ING Financial Markets also warned export-reliant economies such as Hong Kong, Taiwan and Singapore "will continue to suffer from a persistence of deflation or very low inflation and low gross domestic product growth, as US demand remains anaemic throughout 2003."
Malaysia is expected to grow 5.7 percent next year, lifted by rebound in exports, a stronger private sector and favorable government policies, said Mohamed Ariff, executive director from the Malaysian Institute of Economic Research.
The government is expecting growth of between four to five percent this year.
On inter-regional trade, Ariff said: "Our sluggish exports to Europe and US are to some extent compensated by increased exports to Asian countries, which include China, Korea and Japan."
China is the region's star performer and economists say that while the Chinese economy will probably slow marginally next year from this year's 7.9 percent, it will remain the Asian standout.
South Korea, which drew widespread praise for building up a strong domestic consumption base, is projected to grow 5.7 percent next year, down slightly from this year's 6.2 percent, the central Bank of Korea said.
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