The Asian economy is the first to recover from the international financial crisis. In addition, cooperation among Asian countries has seen robust progress in the last ten years.
“Asian influence in the world has been rising steadily. Asian countries need to translate the diversity of our region into a driving force for more dynamic exchange and cooperation, we need to increase mutual understanding and trust, and take our cooperation to higher levels,” Chinese President Hu Jintao said at the opening ceremony of the 2011 Boao Forum for Asia on April 15.
Asia’s developing economies are expected to grow by 7.8% in 2011, according to the Asian Development Bank (ADB). In its annual Asian Development Outlook, the ADB predicts that the region will see solid expansion over the next two years.
The ADB also says that stronger economic links between developing countries could offset and reduce the demand for goods and services from richer countries.
Unlike Europe and North America where economic and political integration has progressed in a very synchronous way, Asian integration now refers to the integration of trade and the economy, and is not concerned with the political. This means that the economy should come before politics.
“A key challenge facing Asian integration, therefore, revolves around the question of how Asian countries can get along well with one another and defuse political disputes to minimize the harm to economic integration,” said Zhou Wenzhong, secretary-general of the Boao Forum for Asia.
He thinks that regional trade liberalization is becoming more important among Asian nations and that there is a huge potential to stimulate Asian economies through free trade.
In fact, Asian nations are implementing a free-trade strategy to reduce the reliance on demand from developed nations. The Association of Southeast Asian Nations signed free-trade agreements with China, Japan and South Korea; the three countries are expected to start trilateral free-trade talks in 2012.
It is possible to facilitate the integration of East Asia first. “There are challenges. But if the 10+3 model (ASEAN, China, ROK and Japan) works out, East Asia will turn into a Free Trade Area,” Zhou said.
ADB points out that East Asia will continue to lead the region’s post-crisis recovery with projected growth of 8.4% in 2011 and 8.1% in 2012. “Especially, the Asian two gi- ants –China and India – will both continue to lift regional and global growth,” said Changyong Rhee, the ADB’s chief economist.
As for the role China should play in advancing Asian integration, Zhou says that it depends on the country’s national strength. ADB predicts that the Chinese economy will post growth of 9.6% in 2011.
“In the next five years, China will make great efforts to pursue the strategy of‘going global’. China will encourage enterprises with different ownership structures to invest overseas, and participate in global economic governance and regional cooperation. ” said Hu Jintao.
In the long run, a developing Asia will have to build stronger links with nontraditional markets to maintain growth and make it more inclusive. Asian countries should adopt appropriate policies at different developmental stages to strengthen collaboration which leads to world economic recovery and growth.