Singapore minister says China catalyzes Asia's restructuring

Without China's growth and the Asian restructuring it has catalyzed, the recovery of the Asian economies from the financial crisis would have been much more difficult, a Singapore minister said on Monday.

In his opening address at the East Asian Institute's (EAI) 10th anniversary conference, Tharman Shanmugaratnam, Education Minister and Second Minister for Finance, praised China for providing a boost to the regional economy.

He noted that Asia has undergone two major restructur over the last decade. The first is the restructuring of financial systems and corporate governance following the Asian crisis which began in 1997.

The second is the restructuring of production and trade patterns in the region that has accompanied the ascendancy of China as a major global economic player.

He said that China's unbroken high growth averaging 10 percent per year over the last 10 years has altered the pattern of production, trade and capital flows throughout Asia.

In pattern of exports for example, Tharman said the East Asian economies excluding China and Japan have seen a significant shift from exporting to the United States to exporting to China.

Exports to the United States have fallen from 21 percent of their total exports in 2000 to 14 percent in 2006, while exports to China have gone up over the same period by 10 percentage points, from 12 percent to 22 percent, according to the minister.

In particularly, the Asian manufacturing supply chains has major alteration, with East Asia now exporting large amounts of intermediate goods and unfinished components to China for further processing, before the goods are exported on to the United States and other developed markets.

Meanwhile, China has also grown as a market for export of final goods. About 30 percent of East Asia's exports to China are now aimed at its domestic market, said the minister.

However, he pointed out that it will be a long while before China displaces the United States as the final market for the Asian manufacturing supply chain.

The EAI's conference gathered some of the top scholars from the region to discuss China's direction in the future. And according to the organizers, Singapore's founding leader Lee Kuan Yew is expected to deliver a lecture on this issue on Tuesday.

Source: Xinhua