Asia 'leading world out of slump'

Asia is leading the world out of recession, the region's leaders have said.

Leaders have gathered in Singapore for the annual meeting of the 21 nations that make up the Asia-Pacific Economic Co-operation (Apec) body.

Singapore's Prime Minister Lee Hsien Loong said that, with weaker US growth, "somebody else has to spend more somewhere else in the world".

"This has to be in Asia," he added in a keynote speech to business leaders.

Mr Lee cited China and India, two countries which are recording annual growth of more than 6% this year whereas most countries in the West have been through deep contractions.

"If you look at the broad thrust of policy from China, it is playing a major role in helping contribute to recovery"

Apec seeks new balance of power

"The next few years' growth will be slow worldwide but in the long term, Asia will do well," Mr Lee said.

The International Monetary Fund said last month that Asia would grow by 2.75% in 2009 and 5.75% in 2010, compared with flat to negative growth in the US and Western Europe.

Leaders of the US and Russia will also attend the Apec meeting - which some say reflects the shifting balance of power between the US and Asia.

Chinese boost

Chinese President Hu Jintao told the summit that his government's stimulus measures were benefiting the world economy.

"The series of measures China has adopted to counter the international financial crisis is conducive to the steady and relatively fast growth of the Chinese economy," Mr Hu said in Singapore.

China's $586bn economic and infrastructure stimulus plan has been instrumental to keep its economy growing while the rest of the world slumped.

"Historically, the developed economies led recoveries. This time, it's going to be the developing economies"

Mr Hu also suggested China would use additional measures to persuade Chinese consumers to spend more. China is an export-led economy.

"China will further boost domestic demand, vigorously expand the domestic market, and promote balanced growth of domestic and external demand," he said.

US Treasury Secretary Timothy Geithner also supported China's role in the reshaped world economy.

"If you look at the broad thrust of policy from China, it is playing a major role in helping contribute to recovery.

"The broad thrust of reforms provides a very promising basis for helping underpin a more solid foundation for growth in the future, not just in the region but around the world," he added.

Stimulus wind down

Other attendees at the meeting backed what Mr Lee said.

"Historically, the developed economies led recoveries," said Dennis Nally, global chairman of PricewaterhouseCoopers International.

"This time, it's going to be the developing economies."

The regional body has also vowed to help businesses operate in the region.

"Apec ministers agreed to make it 25% cheaper, faster and easier to do business in the region by 2015," trade and foreign ministers said on Thursday.

Mr Lee also said that countries would have to collectively determine how to wind down stimulus packages that have boosted growth, echoing what the G20 group of richest nations said last week.

"The moment will have to be co-ordinated so that countries come out in an orderly sort of way," he said.

The Indonesian Trade Minister Mari Pangestu backed that view.

"The recovery is fragile and everybody agrees," she said. "How to sustain it means that you can't exit too quickly."

The summit brings together 21 of the world's largest economies who account for 44% of world trade and 40% of the world's population.

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