China not economic threat to Southeast Asia: IMF

China not economic threat to Southeast Asia: IMF

SINGAPORE (AFP): China is not an economic threat to Southeast Asia as the region can find its own ways to be competitive, the International Monetary Fund's (IMF) outgoing deputy chief said in an interview published Friday.

"Even if it's true, in some sense, that you can do everything in China, it's also true that the countries of Southeast Asia can find their own niches," IMF deputy director Stanley Fischer told Singapore's Business Times.

"It's not as if China is operating as a single firm. Some people will invest in China, others will see their opportunities in Thailand or Indonesia or Malaysia," said Fischer, who steps down as IMF's deputy managing director Friday.

He added that a fast-rising China would benefit the region: "I really don't believe that if you have a giant economy in your midst, countries on the periphery are doomed to fall behind."

"I think they'll more likely be helped by the big neighbor, provided it is a trading economy in both directions -- that is, it both imports and exports."

Despite China's economic successes, and advantages such as its vast internal market, Fisher said Southeast Asia would be better placed to withstand the competition if it pursued structural reforms and further opened up to foreign investments.

He expressed the hope that the change of government in Indonesia would lead to a reinforcement of commercial law rules and an open approach to foreign investment to help turn around the ailing economy.

"There is so much in Indonesia that can be developed with the help of foreign investment that, with the right climate, I don't see why Indonesia would be damaged by China," he said.

Thailand would also be a more dynamic economy if it was more open to foreign investments, including the financial sector, Fischer said.

Considering the global picture, Fischer discounted the likelihood of a global recession.

"My guess is that we are scraping along with very slow growth among industrialized countries but that we'll avoid negative growth," he said.