Asia-Pacific growth to slow in 2014, says PECC

Eduardo Pedrosa, secretary general of the PECC, accepts an interview after a news briefing on November 7 in Beijing. Photo:

The GDP growth rate in the Asia Pacific region is projected to slow to 3.7 percent in 2014 before rising slightly to 3.8 percent in the next year, according to a report issued by the Pacific Economic Cooperation Council (PECC) on Friday.

Regional economic liberalization and integration are still the major powerhouses of growth in the Asia Pacific region, said Eduardo Pedrosa, secretary general of the PECC, in the State of the Region 2014-2015 Report released at a news briefing on Friday, which describes cooperation between the US and China, the world's two largest economies separated by the Pacific Ocean, as a key promoter of economic prosperity in the region.

The regional GDP growth rate predicted by the PECC, which is 0.2 percentage points lower than that forecast by the Asia-Pacific Economic Cooperation (APEC) Secretariat a day ago, reflects a bearish sentiment of the council, which was founded in 1980 and now serves as one of the three official observers of the APEC summit.

Pedrosa predicted a growth slowdown in the Asia Pacific region, especially when compared with pre-financial crisis period.

The findings of the report are based on input from 602 opinion leaders, which include officials at ministerial level, as well as the APEC's senior officials and advisers. Among them, 32 percent are bullish on the prospects of the Asia-Pacific growth for the following 12 months, while 16 percent of the surveyed opinion leaders hold a negative attitude.

As for the global economy, opinion leaders are optimistic about the American economy, while some believe that China and Russia will see slowing economic growth in the next 12 months. Despite the fact that China still serves as a major driver of the regional growth, the Asia Pacific region is still undergoing a slowdown.

An increasing number of political and business leaders in the Asia Pacific region have endorsed the notion that China plays an important role in promoting regional growth, but the report indicates that 49 percent of the surveyed opinion leaders list China's economic slowdown as the biggest risk to the region's growth prospects. The other two risks are lack of leadership skills and feeble policy making, according to the report.

Pedrosa said that establishing the Free Trade Area of the Asia-Pacific (FTAAP) has become a consensus of the APEC economies, adding that the region's goal is to realize economic integration, which will create orders worth of 2 trillion US dollars.

The realization of economic integration in the Asia Pacific region, which is a major topic discussed at the ongoing APEC summit, appears to have been hindered by several free trade agreements in the region, such as the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP), some of which are exclusive.

But Jusuf Wanandi, co-chairman of the PECC, described such free trade zones scattered in the Asia Pacific region as the foundation of the FTAAP, saying that these free trade pacts can be used for feasibility research on the region's economic integration.

The goal of realizing economic integration in the Asia Pacific region cannot be easily reached in a short term, but it will be achieved by China-US cooperation, said Wanandi.

(The article is edited by Ding Yi)

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