Business / Economy

Vision for tomorrow

By Pearl Liu in Hong Kong (China Daily) Updated: 2016-03-22 10:37

"I see Boao as having a positive and increasing influence on the region and the world, in two dimensions: The deepening of interpersonal networks and agenda setting," said Kent Calder, director of the Reischauer Center for East Asian Studies at Johns Hopkins School of Advanced International Studies in Washington, DC, who will speak at the forum.

"In this US election year, with Europe facing a crisis of regional integration, the G20 (Group of 20 major economies) convening in China and the G7 (Group of Seven advanced economies) in Japan, it seems likely that East Asia will play an unusually important role in global agenda setting, and the 2016 Boao conference comes at a critical time in that sequence."

Over the past couple of years, economies around the region have started to undergo change once again, thanks to a series of structural reforms. New factors are driving economic development in the region and changing the dynamics of growth.

Not the least of these is China's Belt and Road Initiative, which aims to build a trade and infrastructure network along the ancient Silk Road routes. Other factors include a shift toward domestic consumption in China and a number of economies in the Association of Southeast Asian Nations (ASEAN), the rapid growth in services and fresh economic models.

"I am cautiously optimistic," said Calder.

China's economy will be mildly decelerating, he said, but with positive structural shifts toward the services and domestic demand — with growth supplemented by the early fruits of the Belt and Road Initiative — growth in India, Indonesia and the Philippines could well accelerate.

"The commencement of Asian Infrastructure Investment Bank activities, and deepened cooperative interaction between the AIIB and other multilaterals, such as the Asian Development Bank (ADB), will also be positive developments."

For Calder and other speakers, the way the various initiatives fit together is a major development, as they complement and enhance one another to create a new ecosystem for trade.

The AIIB, for example, can facilitate the Belt and Road Initiative's new trade routes with infrastructure funding. The spread of modern banking and finance can make capital more accessible while multilateral trade and investment pacts can ease the flow of capital throughout the region.

For small businesses, the new sharing economy and avenues for growth such as crowdfunding should also open up new opportunities.

Few initiatives embody this new multilateral approach to regional economic development as the ASEAN Economic Community (AEC). This year marks the first BFA since the regional economic bloc was formally launched on Dec 31.

The role of the AEC — and its ambitious goal to develop ASEAN into a single market and production base with free flow of goods, services, capital and skilled labor — should feature prominently in the discussion of the new dynamic and new vision for Asia. The AEC has the potential to positively impact the global economy.

Francis Tan, senior economist at Singapore-based United Overseas Bank, said: "This will not be a one-year good story, but will benefit the region for the next couple of years."

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