Asia ‘bright spot’ in gloomy global economic environment: China’s Boao Forum report
On the first day of the four-day forum in Hainan, dubbed the Asian version of the Davos World Economic Forum, the Asia Economic Outlook and Integration Progress report was published.
The World Bank said on Monday that an expected slowdown in China is likely to drag the global economy down to its lowest level this century.
The aftermath of the COVID-19 pandemic, war in Ukraine and volatility in the financial sector are slowing the global economy, with the World Bank predicting only 1.7% growth this year.
The Boao Forum report acknowledged the impact of China’s economic growth on production in the rest of Asia and estimated Asia’s weighted real GDP growth to be 4.5% in 2023.
That’s up from 4.2% two years ago, and considering the global economic downturn, the continent is performing “outstanding”, the report said.
The report highlighted how global reliance on trade in Asian goods remains stable, with trade dependence between Asian economies remaining at a “relatively high level”.
“Although global supply chains have undergone various disruptions in recent years, independence among factories in Asia has strengthened, and Asian economies continue to play an irreplaceable role in global value chains,” he noted.
Asia is also taking a “more active and leading role” in coordinating global macroeconomic policy, the report said. It pointed out how Asia hosted the G20 summit last year and will host another this year.
However, citing multiple interest rate hikes in many Asian countries, the report urged Asia to deal with rising debt levels in emerging markets and developing countries.
This increase is due to similar cycles in developed economies such as the US and Europe, providing a “strong recovery” for the Chinese economy as a bulwark against these external influences.
The report said stabilizing exchange rates in major Asian currencies would help reduce inflationary pressures on imports, but warned that Asian labor markets had not fully recovered.
Inflationary pressures in Asia are expected to ease in 2023, but both boosters and depressants may co-exist.
The report also called for Asia to work more closely as a group to address global industrial chain disruptions and secure supply of critical products.
“Asia should take advantage of the regionalization of global industrial chains and actively promote regional economic integration.”