The Chinese market will become a locomotive for retail growth in the Asia-Pacific region, according to a report released by PricewaterhouseCoopers and the Economist Intelligence Unit. Reuters quoted the report, titled 2013 Outlook for the Retail and Consumer Products Sector in Asia, on December 18, 2012, as saying despite China's economic slowdown, the growth of the country's retail market remained as high as 10.9 percent in 2012 and is expected to reach 10.4 percent in 2016 when it is likely to replace the United States as the world's largest retail market.

The report predicted the Asia-Pacific region will remain the premium destination for international retail chains although challenges abound in the regional business environment. Given the sluggish growth of domestic markets and limited investment resources, international retailers find it difficult to implement large-scale expansion plans, said Carrie Yu, a PricewaterhouseCoopers partner responsible for China and Asia-Pacific retail and consumer markets.

Bank of America Merrill Lynch's Fund Manager Survey for December 2012 showed emerging markets are the preferred region for the investors polled. Optimism about China's economy has reached the highest level recorded by the survey. A net 67 percent of the regional survey respondents said China's economy will strengthen in the coming year, up from a net 51 percent in October. A net 38 percent of asset allocators are overweight in emerging market equities, double the level of September's survey.

China's growth is projected to reach 7.9 percent in 2012, according to the World Bank's East Asia and Pacific Economic Update released in Singapore on December 19, 2012. In 2013, China's economy is expected to grow at 8.4 percent, fueled by fiscal stimulus and the faster implementation of large investment projects. With weak demand for exports from global markets, domestic demand has remained the main driver of growth for most economies of the region, the report said.

World Bank Senior Economist Keiko Kubota, the main author of the report, said, "If a shock in growth were to occur, most countries could counter the impact by easing their fiscal policies. For economies in the region that face difficulties in budget execution, particularly of the capital budget, fiscal interventions aimed at increasing private domestic demand such as targeted social assistance or investment tax credits, are very important."