Asian purchasing power is 'strategic weapon' in trade war

By Hu Weijia Source:Global Times Published: 2018/9/26 21:33:41

Fast-growing trade within Asia enables region to offset losses from US protectionism

This is a testing time of uncertainty and change amid escalating trade friction, but if Asian economies can improve their connectivity, they can unleash market vitality and ease the regional impact of US trade protectionism.

A new Asian Development Bank (ADB) report released Wednesday said policymakers in the Asia-Pacific "have a wide range of options at their disposal" to ensure global uncertainty does not undermine decades of continuous growth.

Consumer markets in Asia have long been undervalued. Yasuyuki Sawada, the ADB's chief economist, was quoted by media reports as saying that more than half of the global middle class lives in Asia.

Meanwhile, for China, the importance of the US market has declined. In the first eight months of this year, total trade between China and the region - including India and the Association of Southeast Asian Nations - surpassed trade between China and the US. China is now the largest trading partner of many Asian economies.

In Asia, a growing army of middle-class consumers is driving demand for everything from high-quality food to luxury goods, and that demand can lead to increasingly valuable trade within the region.

Amid the escalating trade conflict with the US, fast-growing trade within Asia can help offset lost exports to the US. The increasing purchasing power of Asian consumers is the strategic weapon of regional economies to address the negative effects of the trade war.

However, a key concern is that consumer markets in Asian countries are still fragmented due to tariff and non-tariff barriers. The trade tensions with the US should remind Asian policymakers of the importance of establishing a more open trading system.

The latest round of negotiations for the Regional Comprehensive Economic Partnership achieved good progress, and some observers believe this development is a positive signal for economic integration in the Asia-Pacific region.

The biggest risk to continued growth in Asia comes from a further escalation of China-US trade tensions, but a more open trading system will be able to help Asian economies confront external challenges and threats.

The author is a reporter with the Global Times.

Newspaper headline: Fast-growing trade within Asia enables region to offset losses from US protectionism


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