Growth in Asia may suffer because of events in Europe and the United States but the “dynamic” region remains fundamentally strong, Australian Treasurer Wayne Swan said on Tuesday.
Fear has gripped investors in the Asia-Pacific since Standard & Poor’s unprecedented downgrade of the United States sent shock waves through markets already roiled by Europe’s debt crisis.
But Swan said he was confident the region was well placed to weather the storm.
“I wake up every day and thank my lucky stars that I’m a finance minister in Australia, in the Asia-Pacific,” he told ABC radio.
“Because what we’ve seen in recent years is a shifting of the guard from West to East in the global economy and we are located in that part of the global economy that is growing strongly.”
Asian demand for its raw materials helped Australia become the only advanced Western nation to weather the global downturn without going into recession, although its economy has hit some turbulence in 2011.
Swan said he believed Asian nations, particularly China, could ride out the current global economic uncertainties and emerge stronger.
“We’re not immune from events in Europe or in the United States, but here, we are fortunate to have a number of countries that are growing strongly – China, which is growing around nine percent,” he said.
“It’s not just a China story, it’s a story of Indonesia, it’s a story of India. It’s a story of many other countries.
“So we are very fortunate to be in a very dynamic region in the global economy and that is a fundamental strength for Australia.”
Despite this, the treasurer acknowledged that there could be a slowing of Asian growth due to the events in the United States and Europe – major export markets for powerhouse China.
“It’s a possibility. You can’t rule anything out. We are in uncharted waters here,” he said.
“But what I do know is that, particularly in China, but elsewhere in the region, there are domestic factors which mean that those countries will continue to grow.
“They may not grow as strongly because of events elsewhere in Europe and in the United States.
“But there are dynamics in their economy which relate to their population growth, which relate to productivity improvement, which mean that they can continue to grow in adverse circumstances.
“How much that will be, we don’t know.” -by Laurent Fievet