The Asian Development Bank (ADB) cut this year’s GDP growth forecast in developing regions of Asia as China’s “zero COVID” approach to containing the virus creates ripple effects on regional supply chains and economic development.
The bank expects the region to grow 4.6 percent this year compared with an earlier forecast of 5.2 percent, it said in a report yesterday.
Growth in China, a key part of the developing Asia bloc, is expected to be weaker at 4 percent this year against a previous 5 percent expansion.
Photo: AFP
The bank also slashed the forecast for East Asia — a region that includes Taiwan, China, Hong Kong, and South Korea — to 3.8 percent from 4.7 percent.
South Asia’s growth forecast was lowered to 6.5 percent from 7 percent for this year, and to 7.1 percent from 7.4 percent for next year, given the economic crisis in Sri Lanka, and high inflation and associated monetary tightening in India.
Economic risks to Asia are “elevated and mainly associated with external factors,” the bank said, adding that tighter monetary policies from the US Federal Reserve and other major central banks, as well as worsening fallout from the war in Ukraine, could hurt growth.
Supply snarls from China’s latest round of lockdowns and growth slowdown there also pose downside risks to the region, the bank said.
“Because China is so critical to many of the supply chains in the region, that has effects on other economies, and that explains part of the slowdown broadly,” ADB chief economist Albert Park said yesterday.
China’s outlook has been clouded by restrictions the country has imposed to control COVID-19 outbreaks, along with an ongoing crisis in the property market.
Economic growth slowed sharply to 0.4 percent in the second quarter, when dozens of cities, including Shanghai and Changchun, imposed lockdowns.
Many economists expect China is likely to miss this year’s 5.5 percent economic growth target by a significant margin.
GDP is expected to increase 3.9 percent this year from a year earlier, an estimate from the latest Bloomberg survey of economists showed.
That is down from the prior survey estimate of 4.1 percent, as the nation’s “zero COVID” policy, a crisis in the property sector and a darkening global outlook continue to weigh on the economy.
For Asia more broadly, Park said the 4.6 percent forecast for the region points to a “pretty steady recovery from the pandemic.”
“Many countries are still recovering demand as COVID-19 has been pretty well managed this year,” Park said. “We’re seeing an underlying increase in demand that’s also driving recovery, as well as good export performance.”
That recovery supported the case for a marginal increase in this year’s forecast for Southeast Asia to 5 percent from 4.9 percent, with some economies in the region seeing benefits from domestic demand following lifts of COVID-19 curbs.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last