Singapore - The recovery of Asian countries from the 1997 financial crisis would have been far more difficult without China's growth and the restructuring it has catalyzed, a conference in Singapore was told on Monday. For the Association of South-East Asian Nations and other countries in the region, "China has been both a source of competition and a major new market for growth," said Singapore's Minister for Education Tharman Shanmugaratnam.
"On balance, however, China has provided a boost to the regional economy," he told delegates focusing on China in the next decade.
The crisis which began in Thailand in July 1997 adversely affected output, stock markets, currencies and other asset prices across most of the region. In the decade since, South-East Asian countries have emerged stronger.
"In fact without China's growth and the restructuring it has catalyzed within the region, the recovery of the Asian economies would have been much more difficult," said Tharman, who is also second minister for finance.
China's dynamic growth has altered the pattern of production, trade and capital flows throughout Asia, he said.
"The East Asian economies excluding China and Japan have seen a significant shift in their pattern of exports, from exporting to the United States to exporting to China."
While their exports to the US have fallen from 21 per cent of their total exports in 2000 to 14 per cent in 2006, their exports to China have increased from 12 to 22 per cent over the same period, he said.
East Asia is exporting large amounts of intermediate goods and unfinished components to China for further processing, before the goods are re-exported the US and other developed countries, Tharman added.
"However, it will be a long while before China displaces the US as the final market for the Asian manufacturing supply chain," he said. "While it is true that China shakes the world, it is still the US consumer who sustains the world."
