China to grow fastest in E.Asia in 2001-World Bank
BEIJING, March 29 (Reuters) - China will probably be the fastest growing economy in East Asia this year with an estimated 7.3 percent rise in gross domestic product, a senior World Bank officials said on Thursday.
Most other Asian countries were forecast to record their third year of "steady" growth following a recovery from the regional financial crisis, despite an expected U.S. slowdown, Jemal-ud-din Kassum told a Beijing news conference.
"China is again expected to be the region's fastest growing economy with expected growth of 7.3 percent in the period leading up to accession to the WTO," said Kassum, vice president for East Asia and Pacific Region for the World Bank.
Beijing could join the World Trade Organisation this year.
"The World Bank expects East Asia to weather the slowdown in the U.S. economy and the wider impact of slowing technology demand, with most countries averaging between three and seven percent GDP growth in 2001," Kassum said.
But Asian countries must push ahead with broad reforms, including financial and corporate restructuring, governance reform and poverty reduction, he said.
"The prospect of a slowdown should send a signal to all policymakers across East Asia and the Pacific that the region has a large unfinished reform agenda," Kassum said.
Governments should also address slow progress in improving education and health, protecting the environment and liberalising trade and investment, he said.
CHINA FISCAL POLICY SOUND
Countries expected to record slower growth in 2001 from 2000 included Indonesia with 4.0 percent, Korea with 4.5 percent, Malaysia with 5.0 percent, Philippines with 3.5 percent and Thailand with 3.0 percent, the World Bank said.
Vietnam would stay steady with 5.5 percent growth as would Laos with 5.7 percent, it said.
Cambodia, Mongolia and Papua New Guinea were expected to report higher growth this year.
Cambodia's GDP was forecast to rise 5.5 percent, Mongolia to 1.2 percent and Papua New Guinea would record 3.1 percent -- reversing a 1.2 percent decline last year, the World Bank said.
China's GDP rose an annual 8.0 percent last year, helped by strong exports and massive spending on infrastructure.
With exports expected to slow this year, the government's use of an expansionary monetary policy to support growth was sound, despite growing levels of debt, Kassum said.
"We think it will be very appropriate to continue the proactive fiscal policy," he said.
Chinese lawmakers have just approved a near-record budget deficit of 259.81 billion yuan ($31 billion) and special state bond issuance of 150 billion yuan this year.
China's export growth is expected to slow to 10 percent this year, from 28 percent last year, said Deepak Bhattasali, chief of the economics unit for the World Bank in Beijing.
Kassum said China's newly-set target for seven percent annual economic growth from 2001-2005 was achievable.
But China needed to make sweeping reforms, allowing the capital market to play a greater role, shoring up shaky state banks, reforming ailing state firms and setting up a more comprehensive social security system, he said.
The World Bank would lend China around $3.0 billion for 30 projects over the next three years, much to relatively undeveloped western China, Kassum said.
09:21 03-29-01
