ASEAN-China FTA plan gets ADB thumbs up<\/p>\n
Cecil Morella, Agence France-Presse, Manila<\/p>\n
The Asian Development Bank (ADB) on Friday backed plans by
\nChina and 10 neighbors to create the world's largest free trade
\narea (FTA), saying Beijing's growth engine could take up part of
\nthe slack in the United States, Europe and Japan.<\/p>\n
China and the Association of Southeast Asian Nations (ASEAN)
\nreached broad agreement at a meeting in Brunei on Tuesday in
\nworking toward the creation of the FTA.<\/p>\n
Brahm Prakash, assistant chief economist of Manila-based ADB
\nsaid Beijing was \"emerging as a major engine of growth in the
\nregion,\" and that its formal entry into the World Trade
\nOrganization (WTO) this year would have a \"positive impact\"
\noverall for Asia.<\/p>\n
He predicted a \"major restructuring of the developing Asian
\neconomies\" over the next few years as China opens up its economy.<\/p>\n
The ADB forecast Friday that the Chinese economy would grow by
\n7.3 percent this year, with the Sept. 11 terrorist attacks on the
\nUnited States having a much more muted effect than in other
\ncountries \"due to Beijing's relatively low dependence on exports
\nand its strong domestic demand.\"<\/p>\n
In its first full year of membership to the WTO next year,
\nChina's economic growth would be sustained at 7.0 percent, it
\nadded.<\/p>\n
\"Certainly, with the 2001 numbers, it would look like the
\nworld economy would grow by 1.0 percent and meanwhile developing
\nAsia (would grow by) 3.4 percent,\" Prakash said.<\/p>\n
Asked if the Chinese economy could be relied on to fill the
\nvoid caused by the absence of growth in the major industrialized
\neconomies on developing Asia, Prakash said Chinese growth \"is
\nvery important in terms of supporting\" its neighbors' fortunes.<\/p>\n
\"It cannot totally replace the large economies like the United
\nStates, European Union and Japan,\" he added.<\/p>\n
The proposed ASEAN-China FTA would cover two billion
\nconsumers, making it the biggest in the world according to
\npopulation. The region has a combined gross domestic product of
\nUS$2 trillion, and two-way trade of $1.23 trillion.<\/p>\n
Two-way trade has been rising steadily since the early 1980s,
\nreaching about $40 billion last year, with China in deficit by
\n$5.0 billion.<\/p>\n
Meanwhile, the ADB said on Friday that while China's WTO
\nmembership would be positive in the long run, \"adjustments to be
\nmade in the short term will have social costs.<\/p>",
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