Asia has less to fear from a crash in China's racing economy than many think, the Asian Development Bank's chief economist said on Sunday, urging experts and officials to refrain from hysteria.
"If China sneezes, you're not going to catch pneumonia. You might catch a cold," ADB chief economist Ifzal Ali told Reuters at a meeting of the Asian Development Bank on the South Korean resort island of Cheju.
"The industrialised countries are picking up and you have alternative markets," he said.
The outlook for the Chinese economy is a leading concern for policy makers and investors around the world, especially in the country's neighbours, who increasingly rely on its demand for their exports.
China is growing at an alarming pace - 9.7 percent between the first quarters of 2003 and 2004, and possibly much faster in recent months - largely because businesses are borrowing heavily to invest in possibly surplus production capacity that could send many of them broke, inducing a bust.
Beijing is trying to slow things down but investors fear that it is either too late or that its measures will themselves push the economy over the cliff.
But Ali said a resurgence of the US, Japanese or European economies would offset a Chinese slowdown, even if it was severe. Japanese gross domestic product grew 1.6 percent in the fourth quarter of 2003, leading some to foresee good prospects for Asia's largest economy.
And economists see robust growth in the United States, so much so that the Federal Reserve is apparently preparing markets for an interest rate rise, some say by the summer.
"Don't be driven by emotion or hysteria," Ali said.
"The United States is charging along... It has always been the (global) engine of growth."
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