Trade with China will Assume New Importance for Asia: Economist

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Last updated at: (Beijing Time) Saturday, March 15, 2003

Trade with China will Assume New Importance for Asia: Economist

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Trade with China will assume new importance for Asia in a year when global economy currently is very weak, said economists attending the forum of Regional Strategic Forecast the Economist Corporate Network held Friday.

In a year of uncertainty Asian economies are pillars of strength and they will increase reliance on domestic demand and exports to China, Robin Bew, chief economist of the Economist Intelligence Unit, the United Kingdom, told the gathering attended by some 200 economists from different parts of the world.

In his analysis on world economic recovery, Bew said that global economy currently is very weak as threat of US war with Iraq looms and oil prices go up.

He pointed out that under these shadows the business sector suffers from over capacity and poor access to capital while the personal sector is reluctant to spend.

He and some other speakers noted that China now buys 2.5 times more from Northeast Asia than 10 years ago and imports much more from Southeast Asia than before.

Conie Bolland, the Economist Corporate Network's regional economist, said that in a year of great uncertainty when the sputtering global economic recovery is complicated by geopoliticalrisks, such as Iraq and the Democratic People's Republic of Korea,Asian economies are in a surprisingly strong position to weather the storm ahead.

"Their central banks are armed with huge foreign exchange reserves. A stronger euro, low domestic rates and growing demand from Asia, especially from China, will help to cushion Asian economies from weaker demand from the US, offsetting some of the negative impacts of a weaker US dollar and the oil shock," he said.

Graham Davis, manager for Business Development and Research of the Japanese Economist Corporate Network, also said that Japan benefits from its trade with China, noting China factor is complementary to its economic improvement.

He pointed out that expansion in China's exports to Japan is also beneficial to Japan as many of the products are manufactured by Japanese-invested companies in China and the expansion help bring down costs of Japanese companies.

Besides, Japanese people can also reap material benefit from itas they can buy inexpensive goods, he said.

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