By Fan Junmei
China.org.cn staff reporter in Guangxi
It's time for Asia to utilize its resources to support its own economy and strengthen the flying geese model with China as the hub, said Josef T. Yap, President of the Philippine Institute for Development Studies.
During an interview with China.org.cn, Yap said one reason for the global financial turbulence is that most of the resources in Asia were used to support the economy of the US. To tackle such a crisis, there should be a way in which resources can be channeled to support the Asian economy. Yap said the Pan-Beibu Gulf Economic Cooperation, as well as China's US$15 billion loans to ASEAN and US$10 billion China-ASEAN Investment Cooperation Fund can do this.
Josef T. Yap, President of the Philippine Institute for Development Studies
The US$10 billion investment fund will significantly help the cross-border economic restructuring of the region and help to promote both regional and domestic rebalancing, stated Yap at the 2009 Pan-Beibu Gulf Economic Cooperation Forum yesterday. He called to strengthen the "flying geese model" with China as the hub. In the 'flying geese' model of regional integration, Japan has played the leading role. "Hopefully, China would be the next new driver in the next several years," said Yap.
Japan, China, and many Southeast Asian countries have been dependent on exports, with the US as one of their biggest markets. As Americans' spending level has decreased due to the crisis, exports from China, Japan, South Korea and the Philippines have also dropped. In the Philippines, many people's incomes have lowered as the financial crisis continues to bite the economy. The electronics industry was severely undermined by the crisis, and most of the unemployment in the Philippines came from this sector. However, Yap said the industry remains robust compared with other industries in the country. "With some factories closing down, many workers lost their jobs, but it is not that bad, especially compared with that of the United States. We still see opportunities," he said optimistically.
The Pan-Beibu Gulf Economic Cooperation identified projects that can be financed by resources, covering transportation routes, logistics, passenger liners, and air routes. The trade between Guangxi Zhuang Autonomous Region and the Philippines is vital for both sides. "Because there are very good links between north China and south China, we can even trade with north China indirectly; other parts of China would also be involved." Yap also noted that the Philippines is encouraged to come to visit Guangxi, especially Nanning, the Green City, to learn about city planning and advancing urban development in an environmentally-friendly way.
The 2009 Pan-Beibu Gulf Economic Cooperation Forum closed August 7, 2009, in Nanning, Guangxi Province.
According to Yap, East Asia should maintain its outward orientation and rely on exports, but work to expand markets in Southeast Asia at the same time. Yap also said that ASEAN members should increase domestic demand to absorb more intra-regional trade. Both regional and domestic balancing will help address some structural problems of economy. The small and medium-sized enterprises in the Philippines have been frustrated in the development process. Therefore, if China were to lead new production efforts in the region, there would be chances for the Philippines to promote its small and medium-sized enterprises. Yap added that the Philippines is ready to learn industrial policies from East Asia.
The "flying geese model" was developed by Japanese economist Kaname Akamatsu in 1935, to describe how industrialization spreads from developed countries to developing ones. In a broader sense, this model has been used to examine the patterns and characteristics of East Asian integration.
(China.org.cn August 10, 2009)