by Xinhua Writer Xu Lingui
MANILA, June 29 (Xinhua) -- Asian economies have
shown signs of a mild bottoming-out but a full recovery hinges heavily upon the
health of economies in the industrialized world, a top economist with the Asian
Development Bank (ADB) said.
Jong-Wha Lee, the newly appointed chief economist of
the ADB, said the multilateral lender maintains its forecast made in March that
the economic growth of developing Asia will slow down to 3.4 percent this year
before it climbs up to 6 percent in 2010.
"We see some signs of stabilization and bottoming-out
but not really strong recovery," Lee told Xinhua in his office at the ADB
headquarters in Manila. "This year is clearly the worst year for Asia in a
decade."
The financial sector first stabilized and then the
real economy improved, as industrial production inched up on a
quarter-by-quarter basis in Asian countries like China, South Korea, Thailand
and the Philippines, Lee said. Economic activities, reflected in the Purchasing
Managers' Index, significantly increased to over 50percent in countries like
China and Singapore.
He said positive signs in Asia's economy were brought
by quick implementation of large fiscal stimulus packages, monetary expansion,
strengthened domestic and regional demands, and the strong recovery of China's
economy.
In its latest report published in June, the World
Bank scaled up its forecast for China's economic growth this year from 6.5
percent to 7.2 percent. It said, with China and India, the developing world
would narrowly manage to avoid a recession this year.
China's GDP (gross domestic products) grew 6.1
percent year-on in the first quarter of 2009, boosting the government's
confidence to achieve its 8 percent growth target at year-end.
Lee said compared with the World Bank, the ADB is
more optimistic about developing Asia's economy but he expressed concern that
the mild recovery, buoyed by China's growth, would not go a long way.
"Asia's recovery relies on two engines -- one is
China and the other is the industrialized world," he said, "the second, however,
plays a more important role."
Lee said developing Asia would never get back on the
sustained high growth trend if the economies in the industrialized countries
further deteriorated.
"Even the six percent growth is significantly lower,"
said Lee, explaining that Asia should achieve around 8 percent growth, as it did
in the past few years, to help lift millions of people out of poverty.
"But we don't know yet whether a recovery would come
soon in industrialized countries. Europe and Japan are more worrisome," Lee
said.
Japan, whose economy relied on a recovery in foreign
demand of cars and electronic products, saw exports fall 40.9 percent year-on in
May, a plunge larger than expected and dooms the prospect of an early recovery.
Lee said while the crisis taught developing Asia to
lessen its reliance on exports to the industrialized countries, the shift in
development strategy would take as long as ten years.
As of now, the developed countries -- especially the
U.S. -- remain a huge export market for Asian developing countries as a whole.
According to an ADB study, more than 40 percent of the region's textile and
clothing products flow to North America and EU markets, with the percentage
among Southeast Asian countries reaching 70 percent.
Lee said even after we recover from this crisis,
Asian developing countries should not be complacent, calling on governments to
fundamentally change the export-led growth to a balanced one.
"How to strengthen household consumption; how to channel savings into the region's investment rather than continue to buy U.S. Treasury bill -- these changes need coordinated efforts and regional response," Lee said.
Lee said rising commodity prices also pose a threat to Asia's recovery as most of the developing countries in the region rely heavily on import for food and oil. And the governments should also remain alert to signs of social and political instabilities, he warned.
Special Report: Global Financial Crisis
