CHINA’S rapid economic upswing will offer unprecedented market opportunities for neighbouring economies in East and Southeast Asia in the coming two decades, said a senior expert with the Asian Development Bank (ADB).
China’s growth has induced a variety of dramatic adjustments in East Asia, but the benefits for every regional partner will outweigh the costs if accommodating multi-lateral trade policies are developed, said David Roland-Holst, a senior expert with the ADB Institute.
Roland-Holst wrote a report released last Friday concerning China’s emergence and East Asian trade patterns through 2020.
With a PhD in Economics from the University of California at Berkeley, he is also the James Irvine Professor of Economics at Mills College and director of the Rural Development Research Consortium at U.C. Berkeley.
“While China won’t become the region’s largest exporter until 2010, it will be the largest East Asian importer by 2005,” he said, adding that China’s internal market growth will accelerate other East Asian economies’ exports and income growth and create historic opportunities for regional investors.
The report said China would outperform Japan to become East Asia’s largest trading country by 2020. “During the upcoming two decades of sustained and dynamic growth, China will develop a structural trade surplus with Western economies,” Roland-Holst said. “But a deficit of about the same magnitude with East Asia will arise, and most of the net benefits of China’s export successes will ultimately accrue to its regional neighbours.”
According to the report issued yesterday, China will play two roles in the region due to its sheer size and stage of development. It will stiffen regional export competition in a broad spectrum of products.
“However, China’s long-term growth trajectory will also make it a prominent importer in East Asia,” Roland-Holst said, adding that this aspect has attracted less attention because China’s internal economy is still emerging.
China’s economic emergence over the last two decades, and in particular its recent accession to the World Trade Organisation, portends a dramatically changed landscape for East Asian trade.
With more than US$50bil (RM190bil) in foreign direct investment (FDI), China outperformed other economies to receive the most FDI in the world in 2002, and its foreign trade hit US$600bil (RM2280bil) for the first time.
This has aroused concern around the region, where China’s success as an exporter is perceived as a threat to other economies that rely on external demand as an essential source of growth. – People's Daily