The APEC summit is just over a week away and all stops are out in Beijing to make it an economic and diplomatic triumph, despite the huge underlying challenges in managing China’s relations with the region. The primary goals and foundations of APEC are economic — delivering on Asia’s economic development ambitions within the framework of the rules-based global economic system.
Launched as a political bloc and security pact in the aftermath of the Vietnam War, ASEAN has evolved to embrace an ambitious economic agenda. Its latest project is to establish the ASEAN Economic Community (AEC) by 31 December 2015. But is this likely? The blueprint for achieving the goal envisages the AEC standing on four pillars and meeting the deadline depends on progress on each of them.
The ASEAN Economic Community, planned to come into effect in 2015, is expected to liberalise goods, capital and skilled labour flows in the ASEAN region. While there has been considerable progress in the area of trade integration, financial integration still lags behind. The ASEAN Banking Integration Framework, which aims to liberalise the banking market by 2020, could help pave the way for further integration and the entry of ASEAN banks into regional banking markets.
Greater banking integration in ASEAN will benefit the region.
The rising tensions between China and Japan over the Senkaku/Diaoyu islands has led some experts to draw parallels with the Sarajevo incident, which sparked off World War I in Europe. Yet while is a significant risk that the conflict will result in a military confrontation, an all-out war is unlikely given economic reasons.
The risk of conflict in the South China Sea is significant. China claims it has sovereign rights to nearly all of the territory, which is believed to sit atop extensive reserves of oil and gas. The claims are however fiercely contest by regional players such as Taiwan and the Philippines. As diplomacy is not likely to be a sufficient means of quelling rising tensions, the United States must make hard choices and put forth the effort necessary to ensure the South China Sea remains peaceful in 2013 and beyond.
The International Monetary Fund has warned policymakers to “stand ready to respond” to any prospective risks of overheating, amid widening fiscal imbalances and rising asset prices in several Asian economies.
Asia will lead a three-speed global recovery, with domestic demand supported by favourable market conditions, robust consumer confidence and rising real wages, said the IMF in its annual report on Asia.
ASEAN leaders on Thursday called for urgent talks with China to ensure that the region’s maritime disputes did not escalate into violence, with the Philippines and Vietnam renewing calls for a binding “code of conduct” that would set clear rules for how claimants to the disputed territories of the South China Sea can act.
A large proportion of Asian countries are currently at the top of the working-age population hump. For them, the window of opportunity to prepare for an older population will close within the next decade. But how can Asian countries take advantage of this window of opportunity? They can start by reforming retirement income provision systems, especially given the retreat of traditional family support.
In the next 30 years an additional one billion people will call Asia home.
Asia’s developing economies will pick up speed in 2013 but its recovery will remain fragile said the Asian Development Bank on Tuesday, citing vulnerability to external shocks and increasing geopolitical disputes as threats to growth.
The economies of developing Asia appear to have settled into a new growth path that will allow the region to expand by between 6 percent and 7 percent a year — a pace that is significantly slower than that seen before the global financial crisis, but represents a stable pattern that could last over the next decade.
China is reportedly demanding for the annual China–Japan–South Korea Trilateral Summit to be postponed over its unresolved dispute with Japan over the Senkaku/Diaoyu islands, claimed the Kyodo News Agency on Thursday, even as former Japan Prime Minister Yasuo Fukuda prepares to meet with Chinese President Xi Jinping this month to discuss Sino-Japanese ties.
