China and India power Asian growth
Published: 07 Aug 2003 13:20 BST
China and India will become the twin powerhouses of Asia between now and 2007, according to a new report.
The Asia Pacific region, excluding Japan, is expected to grow at an annual average of 5.6 percent until 2007, becoming the world’s fastest growing region. The rest of Asia will expand only modestly, according to analysts Economist Intelligence Unit (EIU), in a report from wire agency AFP.
China's economy is projected to grow 7 percent this year, despite the impact of Sars, as export volumes continue to expand and domestic demand remains strong. India, on the other hand, should grow at an average 5.9 percent in this fiscal year and 6.7 percent in 2004 to 2005, and will be driven largely by the services sector.
In the meantime, the rest of Asia is expected to show only moderate or weak economic growth over the next few years, said the report.
As China and India rise in the economic standings, more technology companies will shift their operations to these countries to take advantage of lower labour costs and booming economies.
Last month, aircraft-electronics maker Honeywell decided to move its regional headquarters from Singapore to Shanghai. Customer proximity and China’s significant presence in the region were reasons cited by Honeywell China’s chairman and president, Francis Yuen, in a report from wire agency Bloomberg.
Business outsourcing sent to India from US and other firms will help the country soak up more than half the world's offshore business-outsourcing revenue this year, according IT analyst firm Gartner. The country’s revenue from BPO will grow from slightly under $1bn (£620m) in 2002 to $1.2bn in 2003 and will represent 66 percent of the offshore BPO (business process outsourcing) market.
Demand for technology has improved over the last half year, but remains stagnant in comparison to the strong growth rates seen in the late 1990s, reported the EIU.
Up until the 1997 economic crisis, the Asian tiger economies of Singapore, Malaysia, Indonesia and Thailand were thought to be the main drivers of the Asian economy.
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