Internal demand key to Asia' s sustainable development
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E-mail Xinhua, April 3, 2012
Asian countries should further tap the potential of both their domestic markets and Asia's regional market to achieve sustainable growth, as the world economy still needs time to fully recover, said Chinese Vice Premier Li Keqiang on Monday.
"We should promote internal drivers of growth. This is the new trend for open economic development in Asia," Li said while delivering the keynote speech at the opening ceremony of the 2012 annual meeting of the Boao Forum for Asia (BFA).
Asia has its unique advantages in seeking internal drivers of growth as it is home to around 45 percent of the world's population, Li said.
The three-day forum started on Sunday in Boao, a scenic town on the eastern coast of China's southernmost island province, Hainan.
SEEKING "INTERNAL DRIVERS OF GROWTH"
Achieving full global recovery will remain a long and arduous process, as the impact of the global financial crisis still exists and the debt crisis in Europe persists, Li said.
Asia, a region that hosts more emerging economies than any other part of the world, has been the first to recover. Its combined GDP now accounts for over 30 percent of the world's total. Its contribution to global growth also surpasses 30 percent, said the vice premier.
However, the global financial crisis has unmasked Asia's weakness.
Asian economies mostly stay at the upper reaches of the global supply chain and focused on manufacturing and exports, which means too much reliance on global demand, said Wei Jiafu, chairman of China's biggest shipping company COSCO.
Facing uncertainties in the world economy, Asian countries need to seek healthier, more sustainable ways for economic development. They should restructure and upgrade their industries, and expand domestic demands both inside and among Asian countries, said Wei.
Most Asian countries are developing countries, which also gives them room to seek further growth, the vice premier said.
Asia also enjoys a remarkable edge in terms of human resources, he added, as it has the world's largest labor force and largest pool of engineers and scientific researchers.
While maintaining measured investment, Li continued, Asia should fully tap the potential of consumer spending, technological upgrading and improvement of labor skills.
Asian countries should be able to walk using both legs, said Singapore's Emeritus Senior Minister Goh Chok Tong, formerly Singapore's prime minister.
If global demands wither, internal drivers of growth will play an important role to support the economy, Goh said. More co-operation, trade and investment should be encouraged among Asian economies, he added.
In the keynote speech, the vice premier also urged Asian countries to remain open, both to the world and among its members, which he said was the key to the region's achievements in the past.
Countries in Asia should enhance their mutual trust, draw on each other's strengths, promote inclusive growth, and maintain communication and coordination on major international and regional issues, Li said.
"Intra-Asian trade has accounted for over half of Asian countries' total foreign trade, allowing them to reap handsome dividends for development," he said.
Asian countries need to further enhance their consultation, promote trade liberalization and oppose all forms of protectionism, he added.
"Openness and cooperation benefits all and leads to mutually beneficial progress," Li said.
However, he added that "the road toward development will not be smooth and there will be plenty of growing pains," as the overall level of development in many Asian countries is still quite low.
Significant development gaps continue between different Asian countries. Resource and environmental constraints are worsening.
However, Li said that by exploring internal drivers of growth, Asia's economy will be able to achieve robust, sustainable and balanced growth.
CHINA'S TRANSFORMATION URGED
China's economy is closely intertwined with other Asian countries'. China will strive to achieve sustainable development, which will also benefit Asia's healthy development, said the vice premier.
"A faster shift of the growth model holds the key to continued economic growth and social development in China," he added.
Li said the primary task of the economy's restructuring is to expand domestic demand, while the greatest potential of domestic market lies in urbanization.
The country's current efforts to coordinate the development of industrialization, urbanization, and agricultural modernization will help sustain moderately rapid growth in the coming years and improve the quality and efficiency of this growth, Li said.
To switch to a healthier economy, China in March pared its GDP growth target to 7.5 percent for 2012, underlining its intent to make more room for growth mode transformation.
Zheng Xinli, vice-chairman of the China Center for International Economic Exchange, said China's urbanization rate exceeded 50 percent for the first time last year, much lower than the average 70 percent in developed economies.
"Each additional percentage-point increase in urbanization means over 10 million more rural residents becoming city dwellers in China, while each city dweller will spur at least 100,000 yuan (15,873 U.S. dollars) in investment in infrastructure," Zheng said.
Furthermore, Vice Premier Li told the forum that China will deepen reforms and opening-up to remove institutional obstacles on its course to transform growth mode, advance reforms in various sectors including taxation, finance, pricing as well as in income distribution and enterprises.
"China will adopt an even more proactive opening-up strategy dedicated to creating an open, transparent, fair, competitive and predictable marketplace and legal environment for all enterprises in China," he said.
Rajeev Singh-Molares, president for French equipment giant Alcatel-Lucent's Asia Pacific region, said he was impressed by Li's commitment to reform and making the economy more open and modern.
"The Chinese government will continue along the path of reform and the path of economic growth. We are very optimistic about the future of China," he said in an interview with Xinhua.
Being Asia's largest import market and the region's most important source of investment, China will continue to work with Asian countries, expanding cooperation in emerging industries, infrastructure, finance and technology, the vice premier said as he wrapped up his speech.
As a non-governmental and non-profit international organization founded in 2001, BFA has been committed to promoting regional economic integration and bringing Asian countries closer to their development goals.
More than 2,000 government, business and academic leaders from around the globe attended the forum, which this year adopts the theme "Asia in the Changing World: Moving toward Sound and Sustainable Development."
Among attendants of the annual session are Italian Prime Minister Mario Monti, Kazakhstan's Prime Minister Karim Massimov, Pakistani Prime Minister Yousuf Raza Gillani, Iranian Vice President Mohammad-Javad Mohammadizadeh, Thailand's Deputy Prime Minister Kittiratt Na-Ranong and Vietnamese Deputy Prime Minister Hoang Trung Hai.
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