integration drives growth in Asia
Asian countries may have to put aside their differences and work
on a louder, more united voice as they grow in economic and political
"The western voice is much louder... The Asian voice is
much lower... and I think this is not fair. I think we have to
change this situation. Asian media plays an important role to
provide accurate reports and also a positive attitude," said
Long Yongtu, secretary-general of the Boao Forum for Asia last
Friday during China Daily's CEO Roundtable.
About 40 executives and CEOs met in Beijing for the 13th instalment
of the roundtable, which has also been held in Shanghai and Hong
Kong in the past. This time around, the lunchtime gathering was
built into the Asia News Network annual conference, attended by
top editors and CEOs from 14 newspapers from 12 countries in Asia.
"As Asia's influence grows, driven in part by China's economic
growth, it is facing new challenges both within and without. One
of the toughest is adjusting to the new realities of trade brought
on by China's entry to the World Trade Organization and its shift
to a market economy," Long said.
"Another is protectionism and the potential for countries
in the region to close themselves in. We think Asia should be
developing in an open international environment," Long said.
"All but 20 of the Fortune 500 are already in China. Transnational
corporations are perhaps the most active players in the so-called
economic globalization. A more joint economic voice may simply
be part of a trend towards supply and manufacturing chains that
span the continent. An auto manufacturing (plant) of an American
company based in Beijing may have spare parts from Korea, Japan,
Malaysia, the Philippines and so on," said Long.
At the same time, strong domestic demand from China and strong
trade ties with the rest of Asia is helping neighbouring economies
and improving regional trade. Trade among Asian countries increased
substantially over the last two decades boosted by China's strong
economic growth. China can help provide a more stable legal framework
to further open markets.
However, economic co-operation can be threatened and some delegates,
like Giorgio Magistrelli, executive general manager of the European
Chamber of Commerce, wondered about them, particularly in the
face of difficulties with Japan.
Long, however, said the differences with Japan are not a serious
and practical threat to economic integration. "Despite the
political differences we've had with Japan, trade and investment
are still very, very, very strong. In the first five months of
this year, China-Japan trade was more than US$70 billion,"
China's willingness to open up further may help eliminate some
of the fears around the region.
"The trade surplus of Asian countries with China has grown
past the US$20 billion mark," he said. "At the same
time the existing competition is a sign of strength. Competition
can be healthy and manageable," Long said.
Around Asia, however, China's rapid industrialization and globalization
may be causing fears, said Felix Soh, deputy editor of The Straits
Times. "Every day we are being told that China is eating
your lunch," Soh said. "While other countries are left
behind fighting for the crumbs."
"The fears may be unfounded," said Long, as other countries
in Asia have trade surpluses with China. "China imports a
lot of products from these countries," he said. "Such
as palm oil, spare parts and electronics."
What is happening now, he said, is a readjustment of all the
"As bilateral co-operation grows, however, the WTO may be
weakened from within, one representative feared. Countries are
now starting to make bilateral free trade agreements irrespective
of WTO provisions," said Wong Sulong, group chief editor
of The Star in Malaysia. "How can countries make this organization
more relevant in the context of growing protectionism?"
The answer may just be patience, said Long. Although he acknowledged
the growing frustrations with the delays of negotiations around
the WTO, he said it was still the most efficient way to deal with
"I believe the WTO is the best answer because you have to
have a legal framework." He said trade disputes may be high
profile news, but they represent a miniscule part of trade. The
trade surrounding anti-dumping cases against China in 2003 amounted
to 0.5 per cent of all trade. In 2004, that number was 0.3 per
China's strategic adjustment under globalization
"Labour, industry capacity and capital surpluses are potential
risks for instability for China's economy. Our GDP has grown 10
times and energy consumption 40 times since the 1950s There is
a need for strategic adjustments to deal with rural reform, diverse
central-local interest, rising unemployment, aging population,
urbanization, inflation, excess investments, sustainable development
and also quite importantly, international capital crisis,"
said Professor Wen Tiejun, dean of the School of Agriculture and
Rural Development at Renmin University.
"In the years to come, China's sheer size may challenge
its financial growth. The country has a lot of people. The working
population is 800 million. We have a very serious oversupply of
labour... Total labour in China is two times the total of other
developed countries," said Wen, also a top researcher at
a handful of top economic think tanks and policy centres. He was
one of six experts who made presentations on topics ranging from
the future of China's political relationships to changes in newspaper
The same numbers that make China such an attractive market may
also pose challenges for the country. "China has 800 million
people of working age - 500 million in rural areas, creating a
potential migrant labour force of 300 million people," Wen
The country also has a large industrial surplus, with oversupplies
of 70 per cent of its industrial products since the mid 1990s.
At the same time, there may just be too much cash kept in domestic
China is in a period of industrialization, also in a period of
globalization, Wen said. Economic growth must rely on foreign
trade. China also faces a period of adaptation as it moves, step
by step, towards a market economy and will face two challenges.
At home, it will have to deal with diverging central and local
On the world stage, the challenge for Asian countries will be
to reduce losses caused by drops in the US dollar. As China's
GDP continues to grow year after year, the country will have to
look more and more towards the international arena to maintain
the trend. Although GDP growth is not at the 35 per cent rate
of the mid 90s, it is also well above the 4.8 per cent low of
1999. Dealing with the challenges of a market economy has meant
trying to compensate for very high economic growth, given the
cyclical nature of the market economy, by working to smooth any
depressions as much as possible. "China is dealing with a
very typical capitalist problem, that it has cyclical crisis,"
said Wen. At the same time, said Wen, globalization is underlined
by such successful experiments as the North American Free Trade
Agreement and the European Union. With these trading blocks in
place, Asia, internationally, faces very serious challenges. One
thing that will be required - not just for China but all its trade
partners in the region - is a plan to adapt to world trade.
"We've got to have a new strategy jumping out from this
regional integration. If we want to have Asian integration, we
need to have a new project. The question left for Chinese: What
is the essential meaning of globalization and free trade in deed?"
The crystal ball for China's future
One particular difficult problem for China is predicting the
future. We might be better off looking at a crystal ball, said
Anthony Saich, professor of international affairs and chair of
the Asia programme at the Centre for Business and Government at
the John F. Kennedy School of Government at Harvard University.
Saich opened the day of discussions on Friday and presented his
views on China - Asia Political Relations.
China and the rest of Asia will have to face a challenge: The
lack of a regional apparatus to combine very different and even
competing nations. Asia is a diverse continent without the similarities
in background and even religion that have made the European Union
possible, said Saich.
"I would say those conditions in Europe are still missing
in Asia. Aside from the economic challenges China faces at home,
the country will also have to deal with challenges outside its
borders and work towards ever smoother political relations within
the region, continue to put emphasis in its economy and look towards
the future. China needs to demonstrate that its growth will benefit,
and not be detrimental, to its neighbours," said Saich.
China's exports will continue to expand, he said, but the growth
is bound to slow down. As China's influence grows, challenges
may come from different and unexpected areas, such as the United
States. "Although it is unlikely any country may surpass
it in military might, regional alliances may be able of opposing
the world's only superpower. I think it's going to be difficult
for the US moving forward," said Saich. "After the Cold
War, it has been very lazy in developing a new strategic vision.
However, it may also be a challenge for China to develop a strategy
to increase its influence in the regional and international arenas
on the one hand without hurting US influence on the other.
"In summary, considering the challenges ahead for Asia as
a whole, we need far more thinking and perhaps new frameworks,"
The last panel of the day focused on the ongoing changes in the
media industry in the country, including issues such as newspaper
readership, the impact of the Internet and new approaches to journalism.
ANN delegates actively participated at the questions and answers
session and posed lots of questions and ideas relating to media
industry development in China and its impact with the rest of
Asia. Xiong Lei, executive editor of China Features at Xinhua
News Agency, Shen Yin, executive director of research company
CTR, and Hu Shuli, editor-in-chief of Caijing Magazine, led the
For enquiries, please email Alexander Wan, executive editor,
China Daily CEO Roundtable, at email@example.com.
(June 28, 2005)