HSBC: Reopening China's Economy Will Boost Asia's Economy
JAKARTA - The Hong Kong and Shanghai Banking Corporation (HSBC) Chief Asia Economist Frederic Neumann said that the reopening of the Chinese economy, aka China, will boost the Asian economy.
"We see a smoother path, stabilization arrangements fairly quickly, and stabilization of Asian countries' economic growth assisted by the reopening of China's economy," Frederic said in a media briefing "Asian Outlook 2023", quoted from Antara, Monday, January 16.
According to him, 2023 will be marked by monetary policy tightening in response to rising inflationary pressures across Asia and the world, particularly in the form of raising the benchmark interest rate.
Therefore, the reopening of the Panda Country economy helps more regions in Asia in terms of trade as China is the most important trading partner for many Asian economies. That way even if other developed countries don't recover quickly, opening up China's economy will help the regional trade cycle to tourism.
Not only that, Frederic also believes that the reopening of China's economy will support the commodity markets of several countries in Asia and the Pacific, such as Australia, New Zealand and Indonesia.
Apart from China's economic recovery, another factor that has helped stabilize Asia's economy is lower inflationary pressures that have enabled central banks across Asia to tighten their policies until the middle of this year at the latest.
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"Asia doesn't have a central bank continuing to tighten policy beyond the second quarter of this year. The suspension of monetary policy is really going to give us some breathing room during the second half of this year," he said.
Then, he said, the continuing trend of relocating foreign investment would strengthen the Asian region's economy, especially to Southeast Asia and South Asia.
Foreign direct investment into places like Vietnam, Malaysia, Singapore and India will remain very strong, even if the global growth environment is quite weak. The trend is thus a testament to ongoing manufacturing competitiveness in Asia.