Asia's economic recovery prospects are promising

The 2023 annual meeting of the Boao Forum for Asia, with the theme of "An Uncertain World: Uniting, Cooperating, Meeting Challenges, Opening, Inclusive, and Promoting Development", was held in Boao, Hainan, from March 28 to 31. This is the first time that the annual meeting of the Forum has been fully resumed offline after three years of the epidemic, and it is also an important multilateral diplomatic event at home after China's two sessions. This forum attracted more than 2000 political, business, and academic representatives from over 50 countries and regions to participate. It also conducted exchanges of wisdom and ideas around the four major topics of "development and inclusiveness", "governance and security", "regional and global", and "current and future", with the aim of jointly discussing Asia's economic recovery and world development plans, and promoting international solidarity and cooperation.
The "Asian Moment" of Global Economic Governance
"This year's annual meeting will continue to focus on cutting-edge issues of development in Asia and the world, working to build consensus among countries to jointly promote the recovery of the world economy after the pandemic, and promoting greater policy coordination and solidarity and cooperation among the international community to meet common challenges and promote common development," said Li Baodong, Secretary General of the Boao Forum for Asia.
In recent periods, some international institutions and experts have become increasingly optimistic about the prospects of the Asian economy this year. The report released by the Boao Forum for Asia, "Asia's Economic Prospects and Integration Process" (hereinafter referred to as the "Report"), points out that although the external environment for the growth of Asian economies in 2023 is relatively severe, as the main engine of the world economy, the overall pace of recovery of Asian economies will accelerate in 2023. The weighted real gross domestic product (GDP) growth rate of Asian economies is expected to be 4.5% in 2023, up from 4.2% in 2022.
According to previous IMF analysis, China and India alone will contribute half of global growth in 2023. Each percentage point increase in China's economic growth will increase output in other regions of Asia by about 0.3%. In addition, the contribution of other regions in Asia will also reach 1/4.
According to the Report, against the backdrop of a slowdown in the world economy and the risk of fragmentation of globalization this year, it is expected that the overall pace of recovery of the Asian economy will continue to advance, the process of regional production, trade, investment integration and financial integration will accelerate, and Asia will grasp the "Asian moment" of global economic governance.
"The expected data is higher than the global average growth, and we are optimistic about the prospects for economic development in Asia." Zhang Yuyan, Institute of World Economics and Politics, Chinese Academy of Social Sciences, interpreted the Report by analyzing employment, prices, and trade. He pointed out that last year, the overall growth of Asia's economy was linked to external monetary and fiscal policy adjustments, especially in the United States and Europe. The increase in interest rates by the Federal Reserve and the European Central Bank has a significant impact on the world economy and Asian economies.
Zhang Yuyan said that in 2022, Asia's foreign trade in goods remained accelerating. Foreign direct investment in major developing economies such as China, Indonesia, Vietnam, and India has performed well. In 2023, adverse and favorable factors affecting trade and investment in Asia will coexist. Therefore, the trend of investing in Asia is strengthening and will continue to maintain momentum this year.
Outstanding uncertainty is a prominent feature of today's world economic development. "Whether it's the COVID-19, geopolitical conflicts, the world economic downturn, or global warming, each challenge is not only about the present, but also about the future. In the face of these challenges, the international community's voice and desire to strengthen cooperation and promote development are even stronger." Li Baodong said.
Asia's trade dependence remains stable
Zhou Xiaochuan, Vice President of the Boao Forum for Asia, said that Asia is a key driving force for world economic growth and sustainable development. Despite continued volatility in the international situation and weakening global demand, Asia will make an important contribution to global growth and stability in 2023. The steady implementation of regional free trade agreements such as the Regional Comprehensive Economic Partnership Agreement will bring greater dividends from institutional openness and assist in post epidemic recovery. Green development and the digital economy will provide strong new drivers for Asia's growth.
"As production, consumption, and foreign economic and trade activities return to normal, China will become an important driving force for economic growth in Asia and even the world," Zhou Xiaochuan said.
Currently, with the continuous development of economic globalization and regional integration, Asian countries are facing enormous opportunities as well as many serious challenges. How to respond to the challenges posed by globalization to countries in the region, maintain the healthy development of the region's economy, and strengthen mutual coordination and cooperation has become a common issue faced by Asian countries. "In the past, the supply chain was cost oriented. But now, we pay more attention to security." Liang Weite, chairman of the Boao Forum for Asia Guangdong Hong Kong Macao Greater Bay Area Construction Committee for Macao, said that in recent years, the COVID-19 epidemic, geopolitical conflicts and the successive occurrence of sanctions have brought a serious impact, making people realize that they should not only pay attention to the cost of the supply chain, but also pay attention to security.
The Report also demonstrates that the process of regional economic integration in Asia is continuously advancing from the perspectives of trade in goods, trade in services, integration of direct investment, financial integration, and development processes among Asian economies. In 2021, Asian economies will maintain a high level of trade dependence on Asia, reaching 57.4%. China and ASEAN, two important trading centers in Asia, are full of cohesion. Asia's digital economy and digital trade continue to lead the world, while Asia is also a hot spot for green capital and green technology.
The Report points out that despite various shocks to global supply chains in recent years, the dependence of Asian factories on themselves has increased, and Asian economies play an irreplaceable role in global value chains. China still maintains its leading position in Asian intermediate product trade. Among the 22 intermediate products with the largest trading volume, China has 20 leading positions. Asian economies play an irreplaceable role in global value chains, and the process of regional production, trade, investment integration, and financial integration will accelerate.