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Asia meets for joint economic action

CHINA and other regional emerging economies will take the lead in helping the world rebound from the financial crisis, according to an organizer of a major Asian summit.

"The emerging markets represent the future of the world economy," Long Yongtu, secretary-general of the Boao Forum for Asia, said yesterday as this year's three-day conference kicked off in south China's Hainan Province.

Established in 2001, the Boao Forum is a pan-Asian platform for dialogue on key issues affecting Asia and the world. The theme of this year's annual conference is "Asia: Managing Beyond Crisis."

Leaders and former leaders from more than a dozen countries and regions have been invited to attend the forum, at which Chinese Premier Wen Jiabao will give a keynote speech and former US President George W. Bush is also scheduled to speak.

The financial stress that began in developed countries is now challenging Asian nations with sluggish exports, shrinking investment, falling demand, fewer jobs and lower incomes.

In March, the World Bank lowered its growth forecast for the gross domestic product of 20 East Asian and Pacific developing economies by 1.4 percentage points to 5.3 percent.

Zeng Peiyan, the vice chairman of the forum's board of directors, said yesterday the financial authorities of Asian countries need to strengthen information exchange and communications in order to better monitor global capital flow and avoid the spread of financial risk.

Zeng, a former Chinese vice premier, also noted that Asian countries should increase mutual investment and expand trade to make up for the gap created by reduced demand from the American and European markets.

Asia will provide a growing market for the region's economy, said Bob Hawke, former Australian prime minister.

"Intra-Asian trade will increase," he said. "The most important thing is ... that they do not lapse back into protectionism. That is the worst thing that could happen."

Trade and investment within Asia is indeed increasing.

Despite the impact of the financial crisis, mutual investment between China and Association of Southeast Asian Nations has continued to expand, approaching US$60 billion at the end of last year.

The countries are now working to build a China-ASEAN free trade area, to be completed in 2010.

"If a free trade zone can be established in East Asia or even in Asia as a whole, the advantages are obvious. With 3.8 billion people, or 62 percent of the world's population, Asia has substantial potential in its production and consumption," said Chen Zhiwu, a professor at America's Yale University.

Looking ahead, Asian economies should consider ways to boost their influence amid the reform of the global financial system and ensure mutual interest during this vital era, said Fan Gang, director of the National Economics Research Institute of the China Reform Foundation.

Asian economies are gaining weight in the international financial system, with large volumes of foreign exchange reserves and relatively healthy financial systems.

As most forum representatives have witnessed, if the Asian economies want to turn the crisis into opportunity, they should build a growth pattern that is more balanced between domestic demand and exports, experts said.

In order to achieve that goal, Asian economies have to make strenuous efforts in domestic reform, they added.


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