WB: China's economic development revives East Asia, Pacific region

The economic recovery in East Asia and the Pacific area have been notable, but if China is excluded, the achievement of the region is not as outstanding as it was included, according to a report released by World Bank (WB) Tuesday.

The latest East Asia and Pacific Update, called "Transforming the Rebound into Recovery", says that some countries in the region have launched some large and timely fiscal stimulus packages to drive the rebound in the region and to boost the confidence in a global pick-up, and these measures are led by China and South Korea.

According to the report, the development in the East Asia and the Pacific region is mainly influenced by China. The World Bank predicted 8.4 percent for China's gross domestic product (GDP) growth this year, which can offset three-quarters of the decline in the GDPs of the US, the Eurozone and Japan. The report says that China's huge domestic demand growth will make a positive impact on those countries who export consumer durables, electronic components and raw materials to China.

Meanwhile, the report projected a 6.7 percent growth for the whole East Asia and the Pacific region in 2009. According to the report, if China is excluded, the economy of the developing countries in East Asia is expected to grow about 1 percent this year, which is more slowly than most developing countries in the rest of the world, although Indonesia and Vietnam had a good performance.

The economies in Cambodia, Malaysia and Thailand are contracting and the economy in Mongolia and some of the Pacific Islands are barely growing, according to the report.

Affected by weaker demand earlier in the year because of the financial crisis, the enterprises in the East Asia and the Pacific region were hit at different levels. The measures that cut working hours, eliminating extra shifts, letting temporary or contract workers go and lowering wages were adopted by those enterprises, although some of these measures have been removed now.

The report also estimates that if the economic growth level before the economic downturn can be sustained. Some 14 million people in the East Asia and the Pacific area could get out of the poverty line in 2009, but due to the crisis, those people will still be there in 2010.

Vikram Nehru, chief economist in the East Asia and the Pacific area believed asset price bubbles to be one of the risks that this region faces in its recovery.

The report also projected a 7.8 percent for the GDP's growth in the East Asia and the Pacific region in 2010.
 

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