China Growth Pickup Reassuring but No Game Changer

While developed nations would be thrilled with growth of even 3 percent, poverty-ridden India needs very rapid growth to provide jobs and improve living standards for the estimated two-thirds of its 1.2 billion people who live on under $2 per day. The IMF forecasts growth of 5.4 percent this year and 6.4 percent next year.

One catch for the rest of Asia is that India's heavy reliance on imported oil means many of the benefits of faster growth would flow to the Middle East and other oil producers. Stronger Indian demand for crude could also jack up prices, troubling neighbors also reliant on imported energy.

Partly for cultural reasons, Indians are prodigious importers of gold so economic recovery might boost gold imports but at the expense of a greater lift in imports of manufactured goods from its Asian neighbors.


South Korea ranks behind China, Japan and India in overall GDP but its rapid industrialization following the Korean War has made it wealthy and a powerful global player in industries including autos, consumer electronics, nuclear power, shipbuilding and entertainment.

Despite all that success, South Koreans are habitually looking over their shoulders and comparing their progress to the rest of the world. Part of the insecurity might stem from having bellicose and unpredictable North Korea and Asia's two powerhouses, China and Japan, as neighbors.

Like other wealthy nations, South Korea is also constantly noodling whether its progress has come at too high a price. Those fears were realized earlier this year when hundreds of teenagers died in a ferry sinking that South Koreans blamed on a culture of profit first, safety last.

The central bank earlier this month said growth would be reduced to 3.8 percent this year from the expected 4.0 percent as consumer spending wilted after the disaster.

That would still be the fastest growth since 6.5 percent in 2010 but disappointing given how much stimulus the government has added to the economy.

The near- and medium-term prospects for South Korea's export-reliant economy hinge on recoveries in China, Europe and the U.S. Longer term, policymakers want to make domestic consumption and entrepreneurship bigger factors in growth. That will be a difficult shift because of the immense power wielded by the country's industrial conglomerates.


As individual countries, the 10 nations of Southeast Asia often fall off the international radar unless a big news event such as a natural disaster, coup or plane crash draws attention to the region. But clubbed together under a grouping known as ASEAN, the region boasts 625 million people, GDP of $3.8 trillion and annual trade with the rest of the world of $2.4 trillion.

Growth in Southeast Asia, which spans countries as different as the wealthy city-state of Singapore and poor landlocked Laos, is likely to be driven in the next decade by rising numbers of middle income households, trade within its fledging customs area, and massive expansion of infrastructure.

After a 5.2 percent expansion in 2013, the Asian Development Bank expects growth in the five largest economies of Indonesia, Malaysia, the Philippines, Thailand and Vietnam to be steady in 2014 and accelerate to 5.6 percent in 2015.

Yet the outlook could be derailed because the region's two biggest economies, Indonesia and Thailand, face political ruptures.

Indonesia's recent presidential election failed to produce a clear winner, sparking fears of instability. The official results will be out by July 22. A coup earlier this year in Thailand followed months of destabilizing street protests. Military rule has ended the protests but the political divisions may remerge once new elections are called.


AP Business Writers Joe McDonald in Beijing, Elaine Kurtenbach in Tokyo, Kay Johnson in Mumbai, Youkyung Lee in Seoul and AP writer Eileen Ng in Kuala Lumpur contributed.

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