A two-day World Economic forum on East Asia 2009 was held on June 18-19 in Seoul, Republic of Korea (ROK). It is one of the regional forums of the World Economic Forum that takes place every year.

Participants at the forum focused their debate or heated discussions on how economies in Asia should seek financial coordination and explore new areas to respond to the global financial crisis. Asian economy has shown some positive signs of a rebound, and it is set to recover first worldwide hopefully.

Asian Development Bank (ADB) forecasts mild economic recovery in 2010… 3.4 percent growth this year but could expect a mild recovery of around 6 percent growth in 2010, according to ADB President Haruhiko Kuroda. The ADB projection growth in early 2009 for the Asia economic rim or region, excluding Japan, Australia and New Zealand, of 3.4 percent this year from the last year's 6.3 percent, is based chiefly on the regional internal demand, not necessarily attributed to sole reliance on the American and European markets.

First of all, Asian nations have, since the outbreak of global financial crisis, resorted to financial expansion policies and implemented plans for industrial revitalization, which have so far scored initial successes. The overall state on long-term trend of China's economic development remains unchanged and the relatively-fast growth of Chinese economy still has a positive impact on Asian economy and global economy as a whole. There are positive signs on the part of ROK economy. Meanwhile, Japan's government and central bank have raised their respective short-term forecasts of Japanese economy, and they agree that the worst of the deepest postwar recession is over.

Second, as advanced or forward-looking indicators of the market, Asian stock markets have picked up in an all-round way. Stock rallies in Indonesia and Vietnam surged anywhere from 40 percent to 70 percent as compared to the lowest levels in February this year.

Shares in Japan and ROK have also started to pick up. The value of the ever-depreciating ROK currency won has begun rising or appreciating, and so does the value of some other Asian currencies. Won has had a rally since the end of March but prices are still no compelling. This, nevertheless, poses a sharp contrast to currencies amid an upheaval of devaluation in Central and Eastern Europe and Baltic states.

Third, with the relatively booming trade and capital inflows in the region, world capital has begun channeling to newly-emerged markets once again. Since April, Japan’s production material exports to China have resumed, and it has led to a rise in prices of related materials in Japan. And ROK or South Korea posted a current-account surplus for consecutive months after February.

Moreover, Indonesia, as a country abounding in natural resources, has exported much more goods, and its economy in the next six months will be beefed up or supported by strong consumption and more investment.

In addition, capital surviving the "hibernation" in the United States has since late April begun to channel into newly emerged nations and resources-rich countries and, consequently, Asia is once gain emerging as the main repository of the capital surpluses. And capital inflows would become one of the motive powers for Asian shares to rise or for exchange rates to go on stabilizing.

In fact, with a huge intrinsic demand in Asia, the region inclines to have an immense internal demand. Jim O'neil, the Goldman Sachs economist who first publicized the BRIC (Brazil-Russia-India-China) theory, said recently that there is still a de-linkage of world economy from U.S. economy, and this tendency has been turning more distinct. In this respect, China's economy and economic policy have an apparent role to play in the further expansion of internal demand in Asia, he acknowledged.

What merits particular attention is that there is still an obvious disparity in the performance of Asian economies. First, Thailand and Malaysia still suffer a negative growth because their economic structure imbalance remains unsolved. Second, ROK and Singapore, too, experience the negative growth in 2009 since their economies are related so closely to the global market and they are not spared from the impact of an upheaval in overseas market. Third, Japan is still facing hidden risks despite good signs for the cooperate sectors.

By People's Daily Online and contributed by Liu Junhong, Director of the Globalization Research Center affiliated to the China Institute of Contemporary International Relations