Asia can withstand U.S. economic slowdown: ADB

Asia can withstand U.S. economic slowdown: ADB

KOBE, Japan (Dow Jones): Slower growth in the U.S. won't inflict much damage on Asia, especially given the rise in intraregional trade in recent years, the president of the Asian Development Bank said Saturday.

Dwindling demand in the U.S. will take a toll on Asia by hurting exports of semiconductors, computers and telecommunications equipment, Tadao Chino told Dow Jones Newswires in an interview.

"But the impact won't be that damaging," Chino said on the sidelines of the Asia-Europe Meeting of finance ministers. "The region's economies are recovering - there's no change to that."

Chino said economic growth in the Asia-Pacific region, excluding Japan, is expected to be 6.4 percent in 2001, maintaining the ADB's official forecast released last November.

Chino's remarks might assuage fears that Asia's economic recovery could hit a wall as the U.S. economy rapidly loses steam.

His comments also come after similarly soothing remarks Friday by International Monetary Fund Managing Director Horst Koehler, who said he doesn't expect the Asian recovery to be derailed despite slower U.S. growth. Koehler said the IMF now estimates the U.S. economy will expand 2.5 percent in 2001, compared with its previous forecast for 3.2 percent growth.

Chino said Asia will be able to withstand slower growth in the U.S. because most Asian nations only ship about 20 percent of their exports to the U.S.

Meanwhile, countries such as Hong Kong and Malaysia ship more than 40 percent of their exports to other Asian nations, excluding Japan. China, Taiwan and South Korea send more than 30 percent of their exports to other countries in Asia, he said.

However, not everyone is quite so sanguine.

European Union Minister-Cousellor Etienne Reuter said there was a sense among both Asian and European ASEM delegates that the ADB's view might be overly optimistic. "There was skepticism toward the ADB's optimistic prognostications," Reuter said.

The Asian members of ASEM are Brunei, China, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Thailand and Vietnam.

The EU members are Austria, Belgium, Britain, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the European Commission.