Discussion at the plenary session of the Asian Financial Forum on Jan 16. Photos Provided to China Daily

Hong Kong - Further economic and financial integration in the region is needed to build a more prosperous economy for Asia and the world, according to the consensus of prominent speakers at the fifth Asian Financial Forum (AFF) held in Hong Kong from Jan 16 to 17.

With the lingering eurozone debt crisis, uncertainty in the US economic recovery and political instability in parts of the Middle East, the world has high hopes for Asia to drive sustainable growth in 2012 and the years ahead.

"The most important lesson we can learn from the successful development experiences of Asia in the past decade is that deeper economic cooperation and trade interdependence among Asian countries has significantly increased their economic strength and resistance to risk amid the ongoing financial crisis," said Li Wei, president of the Development Research Center of the State Council (DRC), at the forum on Monday.

His view was shared by David Lipton, first deputy director of the International Monetary Fund (IMF).

"Despite the spillover from crises, Asian economies have remained committed to free trade, and closer financial and economic cooperation," Lipton said. "So it is not a coincidence nor a surprise that Asia has led the global recovery over the past three years."

Regional trade between Asian nations accounted for 52.6 percent of their total foreign trade volume in 2010, up 3.7 percent from a decade ago.

Li pointed out that high-level regional economic integration in Asia will continue to be the major driving force to sustainable growth.

Haruhiko Kuroda, president of the Asian Development Bank, echoed Li's thoughts, advocating more regional cooperation in free trade, finance and exchange rate policies, which will lead to greater economic efficiency and market stability.

Taking a slightly different perspective, Donald Tsang, chief executive of the Hong Kong special administrative region (SAR), stressed the importance of developing Asia's domestic markets as a way to reduce their exposure to disturbances in the global economy.

"We have seen deeper business connectivity and closer government-to-government links in Asia," said Tsang in his speech at the opening ceremony of the forum.

As a result of Hong Kong's policy mix to drive domestic demand in Asia, India is now the city's fifth largest export market while merchandise exports from Hong Kong to India and Russia quadrupled over the past five years.

"China's determination to defeat the forces of protectionism and promote free trade in Asia has been widely acknowledged by the forum speakers," said George Osborne, chancellor of the Exchequer in the UK.

He praised China as one of "the most forthright advocates of free global and open markets".

China has signed 10 free trade treaties with 19 partners over the past decade, most of them with Asian economies.

The Association of Southeast Asian Nations (ASEAN) surpassed Japan to become China's third-largest trade partner following establishment of the China-ASEAN free trade zone in 2010.

Under the Closer Economic Partnership Arrangement between the Chinese mainland and Hong Kong, both domestic and foreign companies have benefited from a wide variety of liberalization measures.

"China is willing to continuously work with other Asian countries to promote the regional economic cooperation," Li told the forum.

"Any multilateral economic cooperation scheme covering the Asia-Pacific region will be incomplete without the participation of China."

International renminbi

Forum speakers saw scope for substantial expansion of the offshore renminbi market in the years ahead.

"Perhaps the most significant positive financial development of 2011 was the meteoric rise of the offshore renminbi business," Tsang said.

Hong Kong played a leading role in internationalization of the renminbi last year, with 87 renminbi bond issues that totaled more than 105 billion yuan ($16.6 billion), three times the value in 2010.

Renminbi deposits in Hong Kong doubled within a year to total 630 billion yuan by the end of 2011. Banks in Hong Kong also handled 83 percent of the global renminbi trade settlement last year.

Osborne expressed the wish to develop London into "a new hub for the renminbi market as a complement to Hong Kong and other financial centers".

He said the growing use of renminbi in the global market will substantially benefit Chinese economic development and the wider world economy.

Optimistic future

While 2012 will likely be difficult, many speakers were still optimistic about the future - in varying degrees.

Tsang told the forum that he is confident about Asia's sustainable growth as its true strength "lies in its wondrous diversity and the tenacity of its people".

Osborne gave three reasons to be optimistic for the future: First, a stronger and richer Asia is an opportunity instead of a threat to the world. Second, Britain can build on its position "as the home of Asian investment and Asian finance in Europe." Last, a new alliance between Britain and its Asian friends can defeat varieties of trade protectionism and "make global finance a force for good".

Kuroda is "cautiously optimistic" on the development of Asia. Despite the economic slump and uncertainties, developing Asia will still show robust growth in 2012, he said. He predicted that the regional economy would perform better this year than in 2011, although its exports might drop due to the falling demand from developed countries.

Lipton held a similar attitude. He noted that the global economy is in highly uncertain times, but "the IMF stands ready to work with Asia to help make sure that the risks for the region are minimized and that the challenges the region faces in the long run are successfully met".

About AFF

The AFF was organized by the Hong Kong SAR government and the Hong Kong Trade Development Council. Some 2,000 business and government leaders from around the world arrived at the Hong Kong Convention and Exhibition Center to participate in this year's session. With the theme "Asia: Driving Sustainable Growth," the forum highlighted opportunities and challenges in the Asia-Pacific region, particularly on the Chinese mainland.