Global and Asian Economies 2002
STRONGER EXPORTS HELPED LIFT THE
NORTHEAST ASIAN ECONOMIES
Although a global economic recovery remained
tentative, the Northeast Asian economies
saw improvements in 2002 due mainly to
stronger exports.
In particular, China's economy grew by 8% in
2002, after an already impressive 7.3% growth
in 2001. Growth was driven by state spending
and booming exports as foreign firms flocked
into the country. Foreign direct investments
reached US$52.7 billion in 2002, an increase of
12.6% from the previous year. China also
approved more than 34,100 new foreign-invested
enterprises, 30% more than the previous year’s.
This brings the total number of foreign firms in
China to about 424,200. China’s successful entry
into the World Trade Organisation, hosting of
the 2008 Olympic Games and 2010 World Expo
will further attract a flood of fresh investments
into the country, creating more jobs and increasing
household incomes.
South Korea, Taiwan and Hong Kong also saw
faster economic advances than expected. An
export rebound, strong domestic consumption
and increased investment spending helped the
South Korean economy to post a 6.2% growth
in 2002, as compared to 3% in 2001. Taiwan's
economy also reversed the 2.2% contraction in
2001 to register a 3.5% expansion in 2002.
Hong Kong's economy grew 2% in 2002,
an improvement over 2001's 1.3%. Although
tourist arrivals rose significantly by 20%, consumer
demand and investment spending remained
depressed due to high unemployment.
VIETNAM AND THAILAND POSTED
STRONG GROWTH
The Southeast Asian economies also performed
better in 2002. Vietnam's economy grew by a
robust 7% in 2002 as it began to reap benefits
from its economic reforms, the bilateral trade
agreement with the US and the implementation
of the Enterprise Law. Thailand also posted healthy
growth of 5.2% in 2002, up from 1.9% in the
previous year due to rising consumer confidence
and a strong pick-up in exports. The government's
supportive measures such as adopting a loose
monetary policy and postponing an increase in
the value-added tax also helped the economy
weather the difficult external environment.
After narrowly escaping a recession in 2001,
the Malaysian economy achieved 4.2% growth
in 2002 on the back of robust domestic
consumption. Buoyed by strong consumption
demand, Indonesia's GDP also edged up to 3.7%
in 2002 from 3.4% in the earlier year.
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