East Asia Rising
Seventy percent of the 130 global economic experts who attended the World Economic Forum in Dalian, China in September said Asia will wield the greatest influence in the global economy before 2020, according to a survey. And Asian economies have been growing at a rapid pace to take center stage.
The combined GDPs of Korea, China, Japan and the 10-members of ASEAN were forecast at US$12.67 trillion this year, accounting for 21.1 percent of the global economy and the first time Asian economies have accounted for more than a 20 percent stake since the International Monetary Fund began tracking such data in 1980.
Analysis of IMF data by the Hyundai Economic Research Institute commissioned by the Chosun Ilbo suggests that Korea's GDP will total $800.3 billion this year, while China's will amount to $4.76 trillion and Japan's to $5.49 trillion, further boosting Asia's stake.
Next year, the Southeast Asian economies will grow to $12.89 trillion, surpassing the $12.7 trillion size of the Euro zone comprised of the 16 European countries that use the common currency. Southeast Asian economies were seen growing 6.8 percent next year, which is almost double the projected 3.5 percent growth rate for the Euro zone. By 2014, the IMF predicts, the East Asian economy will grow to $17.34 trillion, standing on equal ground with the United States, whose economy ranks at the top of the world and is estimated to grow to $17.42 trillion.
This is the first time since China's heyday in the 19th century that the East Asian economic bloc surpassed the European economic zone in terms of size. The reason East Asia has been gaining so much influence is that Asian countries centered around China have been the fastest to recover from the global economic crisis. Anchored more firmly by manufacturing industries than its financial sector, East Asia suffered a lesser blow from the crisis, enabling its economies to continue growing.
As a result, the IMF, the World Bank and other international agencies have been revising their economic growth forecasts for Asian countries upward. The World Bank on Wednesday upgraded its growth forecasts this year for developing Southeast Asian countries from 5.3 percent to 6.7 percent. The World Bank projected Southeast Asian economies will grow 7.8 percent. "China will become the major driver of Asian economic growth," the IMF said. In contrast, Japan's economic role is expected to shrink, falling from 42 percent this year to 33 percent by 2014. China's share of the East Asian economy is forecast to rise from 39 percent to almost half or 48 percent.
Following aggressive economic stimulus measures and a vast domestic market, China expects its economy to expand 9 or 10 percent next year from 8 percent this year. By switching to a policy of spurring domestic consumption, China's economy is expected to grow to $21 trillion by 2027, overtaking the U.S. to become the world's largest economy, Goldman Sachs said in a report.
"The Chinese economy, which once accounted for a third of the global economy, ceded its dominant position to the West as the Industrial Revolution began," said Yoo Byung-kyu at the Hyundai Economic Research Institute. "But due to the global crisis, the Chinese economy has recovered its leading position." In contrast, the economies of the G7 countries were expected to barely emerge from a 3.5 percent contraction to a 1.25 percent expansion.