China Becomes Growth Driver for Asia: Economist

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Last updated at: (Beijing Time) Thursday, March 13, 2003

China Becomes Growth Driver for Asia: Economist

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China now buys 2.5 times more from Northeast Asia than 10 years ago, especially from South Korea, up to five times, said a Hong Kong-based regional economist of the Economist Corporate Network (ECN) on Wednesday.

Connie Bolland, the economist, made the remarks at the ECN's Regional Strategic Forecast conference here to bring to participants the first quarter update for the economic situation in the Asian region.

She said China is now a major export market for a number of Asian economies.

"You can see that South Korea is actually benefiting from the China trade because it has a net trade surplus with China," Bolland said, adding that it is increasingly integrated with China in the hope of making China its market, rather than its competitor.

"Japan has benefited and will continue to benefit enormously from the growth in China. Trade with China and Asia is now as important for the Japanese as trade with the US. Given the moderate growth forecast for the US and confident growth of China,we are quite comfortable in predicting that exports will be a good growth driver for Japan," said David Satterwhite, Japan-based managing director of the ECN, said when presenting the forecast for Japan, which is forecast to grow a mere 0.2 percent in 2003 and 0.7 percent in 2004.

Increasingly, China's mainland and the Hong Kong Special Administrative Region (HKSAR) combined have become more and more important markets to South Korea and China's Taiwan province, Bolland said.

"You can see obviously that China is the favorite of every body in the foreign investors' mind. Hong Kong, Korea and Taiwan are (ranked) the 4th, 6th and 8th most favored economy (respectively). So basically Taiwan is very low in the rank. Korea is in the middle, and Hong Kong has moved up," she said.

Japan is investing a lot less in the rest of the Northeast Asian countries except China, Satterwhite added.

As for the HKSAR, Bolland said, "Hong Kong is still the largest foreign investor to China's mainland. Hong Kong is having benefits and challenges in integrating with the Chinese mainland. We see that exports are benefiting from the mainland, tourism has benefited from China. Last year, you see over 6 million people from China's mainland coming to the HKSAR," she said. The ECN has forecast Hong Kong will grow 2.5 percent in 2003 and 4 percent 2004.

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