Asian nations must cut their “over-reliance” on exports to developed countries and increase trade with each other to return to growth rates strong enough to reduce poverty, a top regional banker said yesterday.
As consumers in developed nations slash their budgets, export-oriented Asian economies are unlikely to the growth rates seen before last year’s economic crisis, Asian Development Bank (ADB) president Haruhiko Kuroda said.
“The outward-oriented Asian growth model has brought tremendous benefits to the region in the past and can continue to do so in the future,” he said at an international conference in Singapore.
“It would serve no one to turn inward and protectionism should be avoided at all cost. But the concentration on G3 markets for final product sales needs adjustment,” he said.
The G3 refers to the US, Europe and Japan, where 60 percent of Asia’s main export are sent.
OVER-RELIANCE
Kuroda said the global economic crisis that started in the US last year “exposed developing Asia’s over-reliance on extra-regional markets for both exports and capital flows.”
The region must hasten efforts to increase internal trade and stimulate domestic consumption as key growth drivers.
While Asia is rebounding from the crisis faster than other regions, it was unlikely for it to return to sustained strong growth unless key drivers are “rebalanced” to give more weight to domestic stimulants, Kuroda said.
Otherwise, economic growth will not be strong and long enough to make a dent on the large number of poor in the region, he said.
Separately, China’s economic recovery is not yet on a solid footing so the country will carry on with its fiscal stimulus for now, Chinese Vice President Xi Jinping (習近平) said yesterday.
Speaking at an economic seminar during a visit to Belgium, Xi forecast that a return to growth across the world would be slow and gradual.
“We have yet to put economic recovery on a stable and solid basis,” Xi said of China. “We will continue to implement proactive fiscal policy.”
STABILIZING
“The overall economic situation in China is stabilizing and improving,” he said.
Xi said signs of a recovery had appeared in the global economy, but any return to growth would be “long and tortuous.”
He also said China and the 27-country EU should improve their dialogue on macroeconomic and financial issues while working to oppose protectionism in trade.
“We should ... strengthen dialogue on macroeconomic and financial issues,” Xi said.
The EU countries that use the euro and the US are keen on China letting its currency, the yuan, appreciate.
“We should follow on the outcomes of the three G20 financial summits — economic financial coordination, push for reform of the international financial system, coordination on international financial supervision,” Xi said.
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