The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) is one of the UN's five regional commissions and the largest intergovernmental organization in the Asia-Pacific region. Its members include almost all countries in the region as well as the United States, Britain, the Netherlands, Russia and Turkey. Every year, the commission offers its assessment of the economic and social development of the region along with its projections and expectations for the year to come. To learn about the commission's latest analysis of the Asia-Pacific economic landscape, People's Daily recently spoke with Kim Hak Su, UN Under Secretary General and UNESCAP Executive Secretary.

People's Daily: What is your general evaluation of the economic development of the Asia-Pacific region in 2006?

Kim Hak Su: The economic growth in the Asia-Pacific region hit 7.1 percent in 2006, the highest among all developing countries and regions and higher than the rate in 2005––
6.9 percent. The growth was fueled by the vigorous development of China and India and the revival of Japan. They contributed 62 percent of the regional gross domestic product and 44 percent of the regional imports. Other elements that stimulated the region's growth came from Southeast Asian countries, especially Malaysia, Indonesia and the Philippines.

Q: China's economic development is an issue that draws wide attention. How do you assess China's economy in 2006?

A: Countries in the region have established ever-closer economic ties with China through trade, investment and a series of economic exchanges. The debate on whether China's economy is overheated has become one of the major concerns of the countries as they formulate economic policies and are therefore widely watched.

China's economic growth in 2006 was indeed amazing. Statistics show that the growth rate reached 11.3 percent in the second quarter of 2006, the highest since the mid-1990s. We estimated that China's economic growth would hit 10.2 percent in 2006, higher than any other country in the Asia-Pacific region. However, our analysis shows that China's economy is undergoing only a partial, rather than overall, excessive expansion. There are almost no signs of overall production capacity excess or stockpile accumulation. At the same time, business revenue has not been affected by the country's overall economic performance. Given these factors, we cannot say that China's economy was overheated as a whole in 2006.

We have noted that the Chinese Government is taking steps to prevent economic overheating. For example, it has tightened its monetary policy, adopted a series of administrative measures to rein in fixed assets investment and investment in other industries and lessened its encouragement for export. There is evidence that the control policy will make a difference. Domestic demand and credit growth may begin to decline in the near future. Recently, China's imports of machinery and equipment have dropped, while the increase in industrial output and property prices has moderately slowed down.

Q: What is your forecast for economic development in the Asia-Pacific region in 2007?

A: Our projections are rather optimistic. The growth rate is projected at 6.9 percent, slightly lower than in 2006. We have three reasons for that. First, we have estimated that the U.S. economy will grow less rapidly. Second, the demand for electronic products is expected to plummet around the globe. Third, the stringent macroeconomic policy may persist worldwide.

Of course, risks that hold back economic development will mount in 2007. We are concerned about possible disorderly adjustments in the Asia-Pacific region. If the U.S. dollar depreciates by a large margin, a worldwide economic recession will occur, dealing a severe blow to the Asia-Pacific countries. If oil prices skyrocket because oil production is disturbed or because the security in the Middle East continues to deteriorate, the Asian economies will also be disastrously affected.

(China.org.cn)