Developing East Asia faces a sharp slowdown in economic growth and a “painful surge” in unemployment that will prevent millions of people from escaping poverty, the World Bank warned yesterday.
A precipitous drop in global demand is slashing exports from the region, resulting in widespread factory closures, rising layoffs and lower wages, the Washington-based multilateral lender said in a report.
There are some glimmers of optimism, however, with China likely to begin recovering in the second half of this year, giving a boost to the region as a whole, it added.
How long the rebound lasts will depend on the health of ailing major economies such as the US, Europe and Japan, which are major buyers of Asian products.
Economic growth in developing East Asia is expected to slow to 5.3 percent this year, down from 8.0 percent last year and 11.4 percent in 2007, the bank said. In December it had forecast growth of 6.7 percent this year.
Excluding China, “the deceleration is even more stark,” said Vikram Nehru, the World Bank’s chief economist for the region.
China’s economy is expected to expand 6.5 percent this year, marking a sharp slowdown from the double-digit growth it had been enjoying before the global economic downturn began.
The bank said there were tentative signs that the Chinese economy may be almost over the worst thanks to Beijing’s huge stimulus spending package, with a recovery “likely to begin this year and take full hold in 2010.”
“We now see early signs of stabilization,” Nehru said.
That was good news for the rest of the region “because China is a very important market for developing East Asia,” he said.
Some private sector economists already were forecasting that China would pull out of its slump by late this year. They pointed to higher bank lending and demand for steel and power as tentative signs of economic activity.
“It’s not a question of whether it will get better. It’s already getting better,’” said Frank F.X. Gong, chief China economist for JPMorgan. “The question is whether something would happen to disrupt that kind of recovery.”
Gong said potential problems include public expectations of a fall in prices, which could discourage spending and investment, a fall in demand for housing or further declines in trade.
Moreover, any recovery in Asia is likely to come too late to spare many people from losing their jobs, the World Bank said.
Officially an additional 1 million people entered unemployment in the region over the year to January, leaving about 24 million without work. In reality the situation is even worse, the bank said.
“Recent numbers are likely to be only the beginning of a painful surge in unemployment throughout the region,” the report warned.
The crisis means that 10 million more people in the region will remain in poverty this year than was expected just a year ago, it said.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS