Asian economy needs more regional cooperation

Export-import banks should play a more important role in further consolidating ties between Asian economies to drive economic growth against all the uncertainties and complexities in the global market and to address the most pressing tasks such as green transition, said officials and industry experts.

The comments were made on Wednesday during the 29th Asian EXIM Banks Forum annual meeting in Shanghai. Top executives from 13 international export credit agencies (ECAs) attended the meeting.

Despite its growing economic size and rapid development pace, the Asian economy still faces various risks and uncertainties as the world economic growth engine weakens and the global supply chain and industrial chain become more fragmented, Wu Fulin, chairman of the Export-Import Bank of China, said at the meeting.

"In this sense, Asian EXIMs should deepen their cooperation to mobilize more capital from the private sector so that financial institutions can serve economic growth with higher efficiency," he added.

The new round of technology and industrial revolution concerning green transition, trade digitalization and technology innovation has also highlighted that there is room for deeper regional cooperation, said Wu.

Financial volatility has become a major challenge for Asian economies, as exports account for one-third of their economy, said Rak Vorrakitpokatorn, president of Export-Import Bank of Thailand.

Disruptions in the supply chain, including freight rate hikes, the surge in crude oil and food prices, and rising new trade barriers, have also underscored the importance of more collaboration on the regional level, he added.

Hakan Uzun, deputy general manager for the treasury department of Turk Eximbank, said that the changes in the global value chain, the nature of large projects that EXIMs mainly serve, and the increasingly sophisticated transaction methods require procurement from multiple countries. This has pointed to the rising importance of deeper regional cooperation, especially among ECAs, he said.

Climate change is one of the challenges that need strengthening connection and cooperation among Asian countries, said Hayashi Nobumitsu, governor of Japan Bank for International Cooperation.

According to the Asia Development Report jointly released by the Export-Import Bank of China and Fudan University, balancing energy transition and economic growth will become increasingly important in Asia as it targets steady growth.

However, resource endowment, economic stages and technological capabilities among Asian countries vary. This underlines the importance of integrating resources, strengthening coordination and fostering cooperation among different economies, according to the report.

John Hopkins, managing director and CEO of Export Finance Australia, the Australian government's ECA, said they have set up a $2 billion investment facility for Southeast Asia to support infrastructure, the supply of critical minerals to facilitate green transition, and the development of small and medium-sized enterprises in the region.