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Print Edition> World
UPDATED: January 31, 2011 NO. 6 FEBRUARY 10, 2011
Taking the Lead in Recovery
China and its neighbors come together to build a global economic powerhouse

ENERGY CONNECTION: Chinese workers check meters on the China-Russia oil pipeline in Daqing, in northeast China's Heilongjiang Province, on January 10. Beginning this year, Russia will use the pipeline to supply China with 15 million tons of crude oil annually for 20 years (WANG JIANWEI)

When it comes to trade, China and its neighbors complement each other perfectly, due to differences in economic development levels, industrial structures, natural resources and labor reserves, Kang said in a recent article in People's Daily.

China exports labor-intensive products and low-value-added products to—and imports capital- and technology-intensive products from—economically developed nations, such as Japan, South Korea and Singapore. Meanwhile, it exports machinery, electric, chemical and textile products to neighboring developing nations, while importing agricultural and industrial raw materials and energy from them.

The complementary nature of China's trade ties with neighboring countries will make regional trade progress possible, especially between China and large nations, like Russia, India and Indonesia, said Kang.

The changing global and regional economic patterns offer opportunities for further regional economic cooperation, said Kang. China and its Asian neighbors are active in multilateral cooperative mechanisms such as APEC, the G20, BRICS (Brazil, Russia, India, China and South Africa) and BASIC (Brazil, South Africa, India and China). These mechanisms have helped boost regional economic integration.

China and its neighbors will be more influential in the world economy in the aftermath of the global financial crisis, said Kang. This region, with the rapid economic development of China, Japan, India, ASEAN and Russia, has become one of the regions with the greatest economic potential in the world.

In 2008, this region accounted for 24 percent of world GDP, and was a global economic powerhouse, along with North America and Europe. When the global financial crisis seriously damaged the world economy in 2008 and 2009, Asia suffered, as well. But developing economies such as China, India and ASEAN quickly recovered, lifting themselves from the crisis with stunning economic growth. Estimates now indicate China and its neighboring economies will become the world's largest regional economy—accounting for one third of world GDP—by 2020.

Along with the region's rise, regional economic power will shift as well, due to countries' varied development speeds, Kang said. Japan, the most developed country in the region, will become less influential, while emerging markets like China and India will play a bigger role.

From 1990 to 2009, Japan's contribution to the regional GDP decreased from 61 percent to 32 percent, while that of developing economies increased from 39 percent to 68 percent. The numbers for China in that time spiked from 7 percent to 32 percent. In 2009, Russia accounted for 8.2 percent, India for 8 percent and ASEAN nations for 10 percent. South Korea made up 5.2 percent of the regional GDP, thanks to steady growth since its economic boom in the 1960s and 1970s.

A multifaceted economic structure has been established in China's neighborhood, and cooperation and interdependence will continue to strengthen in the years to come, Kang said.

Asia's economic and political patterns are undergoing major changes under the influence of world multi-polarization and economic globalization, said Hu. Generally speaking, peace, stability, cooperation and development remain the norm on this continent, he said, adding that Asia is becoming a vigorous and hopeful region. However, Asian countries now face urgent economic tasks, such as adjusting the economic structure and developing a green economy.

Asia also faces security challenges—both traditional and non-traditional—such as political turmoil in some countries, climate change, natural disasters and terrorism. In keeping with its mutually beneficial policies, China will continue to take part in regional cooperation, Hu said.

As long as Asian nations maintain communication and coordination based on mutual respect and stick to peace, development and cooperation, they will play an even more significant role on the world stage, he added.

Trade & Investment

Trade volume between China and other Asian countries was $791.5 billion from January to November 2010, a 36.6-percent increase over the same period in 2009. China imported $446.5 billion worth of goods from other Asian nations, a 41.1-percent increase from the same period the year before. It had a $95.5-billion trade deficit to other Asian countries.

China's trade volume with ASEAN in 2010 was $292.78 billion, increasing 37.5 percent over the previous year, making China ASEAN's top trade partner. China is also the top trade partner of North Korea, South Korea, Mongolia, Japan, Viet Nam, Indonesia and India.

In 2010, China's trade volume with Japan was nearly $300 billion, more than $207 billion with South Korea and about $62 billion with India. Moreover, China is the biggest export market for Mongolia, Japan, South Korea, Malaysia, Thailand and Indonesia.

China's investment to other Asian countries has steadily increased in recent years. From January to November 2010, China's non-financial-sector investment to other Asian nations totaled $2.81 billion. Now China is the biggest investor in North Korea, Mongolia, Myanmar and Cambodia and the fourth largest investor in ASEAN.

(Source: Ministry of Foreign Affairs of China)

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