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APEC: Economy Continues to Be Healthy with Strong Growth

China's economic condition should remain healthy in 2002 and 2003 with strong performance in both GDP growth and exports, said an annual report issued by the Economic Committee of the Asia-Pacific Economic Cooperation (APEC) forum on Wednesday.

Providing a largely upbeat outlook on APEC economy in 2002, the report said that Asian developing members would continue to grow with strong exports and industrial production this year.

"Especially China and Vietnam are expected to register around 7 percent of GDP growth. Thanks to the rebounding private demand and big boost from the government sector, China's economic condition should remain healthy in 2002 and 2003," said the document, titled "The 2002 APEC Economic Outlook."

The 280-page report said that reflecting the recovering global demand and price competitiveness of Chinese goods from the weak Chinese currency, exports of the country will continue to perform well.

Because the Chinese Renminbi is pegged to the US dollar, weakness in the dollar has become another positive factor for Chinese exports, it added.

China's entry into the World Trade Organization also improves its position to induce foreign direct investment in China, which would boost the short-term economic outlook, the report said.

In a breakdown assessment of APEC economies' performances, the report said the US economic rebound has been most crucial for APEC-wide recovery, emerging with inventory re-stocking, brisk business investment, and expanded public spending.

Beginning the middle of 2002, however, it faced the sudden fall in stock prices and the US dollar, subsequent falls in market confidence in economic recovery and even the possibilities of a "double dip," the document said.

However, it does not look like a probable scenario for the recent turmoil in US stock markets to bring about a banking crisis or to lead to another economic recession, according to the report.

The US economy is widely expected to experience a shallow slowdown and then to return to the growth path towards a full-fledging recovery in the near future, it said. The forecasting institutions expect around 2.5 percent growth of the US economy for the year 2002 while private forecasters are predicting a solid growth rate of 3.5 percent in 2003, it added.

The prospect of the major developing Southeast Asian economies are expected to improve further in line with a favorable global outlook and the strengthening recovery process of the domestic economy, the report continued.

It said that Indonesia, Malaysia, and Thailand are expected to achieve a real GDP growth rate of around 3-4 percent in 2002.

As an exception case in the APEC region, Japan does not share the coming global economic recovery in 2002 with other APEC members, the report said.

While the Japanese economy is expected to begin to move gradually towards recovery in the second half of the fiscal year 2002, the growth rate for 2002 is expected to record at best zero percent.

Except for Japan, all other APEC members are forecasted to enjoy higher growth rates in 2002 and 2003, the report concluded.

(China Daily October 24, 2002)

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