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China's expanding domestic market will make it the largest importer in Asia soon and offer opportunities to suppliers from neighboring countries.
Tadao Chino, president of Asian Development Bank, said the bank's study showed China is expected to be Asia's largest importer by 2005.
"The growth of China's domestic market will create opportunities for Asian countries to increase their exports," Chino said.
Huang Yiping, a researcher with Salomon Smith Barney, a member of Citigroup, said China's role in Asia is clearly becoming more prominent and should reduce the dependence of export-orientated Asian economies on Western countries.
This year, China will attract more Asian exports, despite the gloom of a global economy in the shadow of the war in Iraq.
With the growth of China's economy, its role as a driver of Asian exports will expand, Huang said.
According to a Salomon Smith Barney report, exports from the rest of Asia to China will increase by 55-85 per cent in the next four years.
China is now regarded as a competitive threat by some Asian countries. They fear their economies will suffer as the range, quantity and quality of Chinese exports grows.
"While these concerns are understandable, I believe that the opportunities that China's markets will offer, particularly to suppliers and investors from neighboring countries, is a story that needs to be told," Chino said.
Customs figures reveal China posted a US$13 billion deficit with South Korea, a US$5 billion deficit with Japan and an US$8 billion deficit with Southeast Asian economies last year.
Although some Chinese products will displace goods from other Asian countries in western markets, the boom in China's domestic market will offset this impact.
The expansion of intra-regional trade within Asia will largely be driven by China's growing appetite for imports, Chino said.
In order to sustain its rapid economic growth, China must import resources, technology, capital and products that it cannot produce competitively at home.
Rising incomes in China will also alter market trends, increasing the demand for imports, particularly for food, agricultural products and energy, Chino added.
East and Southeast Asia are well placed to capture these opportunities given their comparative advantages of geographic proximity and existing business networks with China.
The increased trade between China and the rest of Asia will also change Asia's current trade patterns, which largely rely on exports to developed economies, Chino said.
To capture the benefits of an emerging China, the best strategy for neighboring Asian countries is to pursue closer regional economic co-operation or integration, Chino said.
Huang from Salomon Smith Barney urged Asian countries to lower their trade barriers to boost intra-regional trade.
Huang predicted that increases in both imports and exports in 2003 would reach 15 percent.
In 2002, exports rose 22.3 percent to US$325.57 billion and imports grew 21.2 percent to US$295.22 billion. China's trade surplus stood at US$30.35 billion.
(China Daily April 1, 2003)
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