The World Bank says economic growth in the East Asia Pacific region will grow moderately this year and next, due to China's changing economy and possible weaker demand in the overall global economy.
In its biannual forecast of the region, the Washington-based development bank says East Asia Pacific, which includes China, will grow at 6.3 percent in 2016 and 6.2 percent in 2017, down from its robust 6.5 percent growth achieved in 2015. The economies of the Philippines and Vietnam will lead the region, with both growing over 6 percent. Meanwhile, the report predicts China's economic growth will slow to 6.7 percent this year and 6.5 percent in 2017 as it shifts from an export-based economy to a consumer-demand driven economy.
The Bank urges Beijing to gradually open sectors dominated by state-owned enterprises to greater competition, and to shift public spending from infrastructure to public services such as education, health and social assistance, as well as environmental protection.
Many economies in the East Asia Pacific region are at risk from low commodity prices and weak external demand, including Laos, Mongolia and Papua New Guinea.
"Developing East Asia and Pacific...accounted for almost two-fifths of global growth in 2015, more than twice the combined contribution of all other developing regions,” said Victoria Kwakwa, incoming World Bank East Asia and Pacific Regional Vice President. "But sustaining growth amid challenging global conditions will require continued progress on structural reforms."
The report calls for governments to boost transparency and strengthen accountability, and urges countries to reduce barriers to regional trade. And the report stresses that the benefits from the digital revolution will be maximized by developing regulatory regimes that favor competition, and by helping workers adapt their skills to the demands of the new economy.