China's emergence as a major trading power in Asia has boosted trade between the region and the rest of the world, contrary to fears that it would displace other economies, the Asian Development Bank (ADB) said yesterday.
In its Annual Development Outlook (ADO) 2003 report, the Manila-based ADB noted that total merchandise traded increased rapidly from January to September 2002.
"The region was an aggregate net exporter of goods, with exports rising 31.3 per cent to US$66.4 billion in September from US$50.6 billion in January," the ADB said.
"Developing Asia's imports from the rest of the world also increased by a moderate US$14 billion or 3 per cent from US$46 billion in September 2001," it added.
Widespread concerns that China, an important producer and exporter of a wide range of manufactured goods, would displace other economies in the region also exporting such products were "not supported by evidence," the ADB said.
"Data show that other countries in the region have benefited from the dynamism of China and Hong Kong through rapid increases in trade and are net exporters to China and Hong Kong," it added.
Singapore's exports to China, for instance, grew by an average of 14 per cent per year between 1999 and 2001, while China's imports from Japan have been increasing at an annual rate of 40 percent to 50 percent.
China also has substantial trade deficits with South Korea, Malaysia and Thailand, the report noted.
Instead of viewing China as a threat, the ADB said the Chinese economy "presents immense opportunities because of its large and growing domestic market."
"It is the second biggest market for Volkswagen after Germany," the ADO said. "Ford anticipates that in 5 years it will become a bigger market for its cars than Japan or Germany."
The report also noted projections by economists that while China would be the region's largest exporter by 2010, it would also be the largest importer by 2005, offering unprecedented market opportunities for other Asian countries.
In the services sector, China is one of the fastest-growing sources of tourists in Malaysia, Singapore and Thailand.
"A rising Chinese middle class also suggests strong potential for services industries in the region, such as higher quality education and health services and more sophisticated financial services," the report said.
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