Economic integration drives growth in Asia

Economic integration drives growth in Asia

Luo Man, Asia News Network, China Daily/Beijing

Asian countries may have to put aside their differences and work
on a louder, more united voice as they grow in economic and
political power.

"The western voice is much louder... The Asian voice is much
lower... and I think this is not fair. I think we have to change
this situation. Asian media plays an important role to provide
accurate reports and also a positive attitude," said Long Yongtu,
secretary-general of the Boao Forum for Asia last Friday during
China Daily's CEO Roundtable.

About 40 executives and CEOs met in Beijing for the 13th
installment of the roundtable, which has also been held in
Shanghai and Hong Kong in the past.

This time around, the lunchtime gathering was built into the
Asia News Network annual conference, attended by top editors and
CEOs from 14 newspapers from 12 countries in Asia.

"As Asia's influence grows, driven in part by China's economic
growth, it is facing new challenges both within and without. One
of the toughest is adjusting to the new realities of trade
brought on by China's entry to the World Trade Organization and
its shift to a market economy," Long said.

"Another is protectionism and the potential for countries in
the region to close themselves in. We think Asia should be
developing in an open international environment," Long said.

"All but 20 of the Fortune 500 are already in China.
Transnational corporations are perhaps the most active players in
the so-called economic globalization.

"A more joint economic voice may simply be part of a trend
towards supply and manufacturing chains that span the continent.
An auto manufacturing (plant) of an American company based in
Beijing may have spare parts from Korea, Japan, Malaysia, the
Philippines and so on," said Long.

At the same time, strong domestic demand from China and strong
trade ties with the rest of Asia is helping neighboring economies
and improving regional trade. Trade among Asian countries
increased substantially over the last two decades boosted by
China's strong economic growth. China can help provide a more
stable legal framework to further open markets.

However, economic cooperation can be threatened and some
delegates, like Giorgio Magistrelli, executive general manager of
the European Chamber of Commerce, wondered about them,
particularly in the face of difficulties with Japan.

Long, however, said the differences with Japan are not a
serious and practical threat to economic integration. "Despite
the political differences we've had with Japan, trade and
investment are still very, very, very strong. In the first five
months of this year, China-Japan trade was more than US$70
billion," Long said.

China's willingness to open up further may help eliminate some
of the fears around the region.

"The trade surplus of Asian countries with China has grown
past the US$20 billion mark," he said. "At the same time the
existing competition is a sign of strength. Competition can be
healthy and manageable," Long said.

Around Asia, however, China's rapid industrialization and
globalization may be causing fears, said Felix Soh, deputy editor
of The Straits Times. "Every day we are being told that China is
eating your lunch," Soh said. "While other countries are left
behind fighting for the crumbs."

"The fears may be unfounded," said Long, as other countries in
Asia have trade surpluses with China. "China imports a lot of
products from these countries," he said. "Such as palm oil, spare
parts and electronics."

What is happening now, he said, is a readjustment of all the
regional economies.

"As bilateral co-operation grows, however, the WTO may be
weakened from within, one representative feared. Countries are
now starting to make bilateral free trade agreements irrespective
of WTO provisions," said Wong Sulong, group chief editor of The
Star in Malaysia. "How can countries make this organization
more relevant in the context of growing protectionism?"

The answer may just be patience, said Long. Although he
acknowledged the growing frustrations with the delays of
negotiations around the WTO, he said it was still the most
efficient way to deal with trade issues.

"I believe the WTO is the best answer because you have to have
a legal framework." He said trade disputes may be high profile
news, but they represent a minuscule part of trade. The trade
surrounding anti-dumping cases against China in 2003 amounted to
0.5 percent of all trade. In 2004, that number was 0.3 percent.