ADB revises China's GDP expansion upward to 10.1%
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A bird's-eye view shows high-rise office buildings in Lujiazui in Shanghai's Pudong New Area. The Asian Development Bank has revised its forecast of China's economic growth this year to 10.1 percent from a September estimate of 9.6 percent. |
The Asian Development Bank has revised its forecast of China's economic growth this year to 10.1 percent from a September estimate of 9.6 percent.
China's faster-than-expected economic expansion will help emerging East Asia to grow 8.8 percent this year, up from a previous estimation of 8.4 percent, the ADB said in its latest edition of Asia Economic Monitor released yesterday.
But it said the weaker outlook for the global economy as well as the phasing out of fiscal and monetary stimulus within the region would mean that economic growth in the region should moderate in 2011.
The ADB predicted China's economy may expand 9.1 percent and East Asia by 7.3 percent next year.
The ADB's projections differed from those in another report released yesterday by the Chinese Academy of Social Sciences, which predicted China's economy to grow 9.9 percent this year and pick up to nearly 10 percent in 2011.
"With the V-shaped recovery in hand, many emerging East Asian economies now face new challenges," the ADB report said.
"They should try to manage strong growth and capital flows amid a weaker external environment."
In several Asian economies, including China, inflation has exceeded targets with surging capital inflows fueling asset price bubbles. Meanwhile, a weaker- and longer-than-expected recovery process in advanced economies will further delay policy normalization, increase economic distortions and lower long-term growth prospects, the report said.
The ADB suggested countries in East Asia should promote policy coordination to meet these new challenges.
"National policies can have significant spillover effects on other countries," the report said. "Thus to attain financial stability and create an environment conducive to sustained growth, the spillover must be considered in the decision-making process."
Specifically, emerging East Asia needs to cooperate closely on exchange rates to turn the swift post-crisis recovery into a more balanced and long-term growth, the ADB said.
"Regional exchange rate cooperation - if handled wisely - can ensure intra-regional exchange rate stability while allowing inter-regional flexibility," the report said. "It may help promote intra-regional trade and investment, and rebalance the region's sources of growth."
