China will continue to be one of Asia's best-performing economies in 2002 and 2003, fueled by buoyant consumer spending and its entry into the World Trade Organization, the Asian Development Bank (ADB) said yesterday.
According to the bank's annual report "Asia Development Outlook: 2002" issued yesterday, China's economy is expected to rise 7 percent this year and 7.3 percent next year. The report attributes China's economic success to the rapidly expanding consumption and the accession to the World Trade Organization.
The report says China's industry and tertiary industry will increase 7-9 percent in 2002 and 2003, and the growth of agriculture will be 2-3 percent.
China's inflation will be 1-2 percent over the next two years, said the report, due to the superfluous productivity in some industrial sectors and the inflow of agricultural products and some cheap imported products.
However, the bank said that China's private sector will have to play an important role if the country wants to solve its growing unemployment problem.
"Private companies can create huge job opportunities that may help laid-off workers from state-owned enterprises become reemployed," Bruce Murray, resident representative of ADB's China office, told a press conference in Shanghai.
The bank estimates China's urban un-employment rate was 3.6 percent last year, slightly higher than 2000. However, that number does not cover workers who were laid off during restructuring of state-owned enterprises and have not found new jobs.
"In the next few years, China needs to create 8 million to 10 million jobs annually for new labor market entrants and to find jobs for the more than 5 million workers who have been made redundant by SOE reform and not yet become reemployed," said Murray.
As for Asia, economic growth of 42 Asian economies, excluding Japan, will average 4.8 percent this year, up from 3.7 percent in 2001, the bank said. That's down from an average of 5.4 percent in the second half of the 1990s and 7 percent in 2000.
A revival in US demand for semiconductors, disk drives and other computer parts is crucial for most Asian economies, which rely on the world's No. 1 economy to buy a quarter of their exports. Singapore and China's Taiwan Province fell into recession last year as shipments tumbled.
Although the US is growing again after last year's recession, lifting demand for Asian goods, its widening current account deficit raises the threat of a "sharp adjustment," which would "tend to reduce the US propensity to import," the bank said.
Other risks to the region's recovery include the possibility that some central banks may choke growth by "premature tightening" of monetary policy. Rising oil prices might fuel inflation and curb growth, the bank added.
Growth in Hong Kong will probably accelerate to 2.1 percent from 0.1 percent, and Taiwan's economy will emerge from recession to expand 2.8 percent.
Meanwhile, South Korea, where growth slowed to 3 percent last year, will probably expand 4.8 percent in 2002.
Growth will also return to Southeast Asia, with the Singapore economy forecast to expand 3.7 percent after a 2 percent decline last year. The Malaysian economy, which grew 0.4 percent last year, will probably expand 4.2 percent.
In South Asia, growth will probably accelerate in India, with the economy expanding an estimated 6 percent this year, from 5.4 percent in 2001.
(eastday.com April 10, 2002)
