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Asian summit to discuss rocket and recession
Mon Apr 6, 2009 10:49pm EDT
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By Darren Schuettler
BANGKOK (Reuters) - The global economic crisis and the security threat posed by North Korea's rocket launch will grab much of the attention this weekend when Asian leaders gather in Thailand for their annual summit.
It will be the first meeting of the leaders of Japan, China and South Korea since Sunday's launch of what North Korea called a satellite, but which many countries saw as a thinly disguised test of a rocket capable of hitting the United States.
The summit, which gets underway on Friday in the beach resort of Pattaya, also comes barely a week after G-20 members agreed a $1.1 trillion blueprint to revive the global economy.
Other issues, ranging from energy and food security to climate change and world trade, will also be discussed by leaders of a region encompassing three billion people and which accounts for nearly 30 percent of global GDP.
The 10 members of the Association of South East Asian Nations (ASEAN) span the political and economic spectrum: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
They will meet first with their counterparts from China, Japan and South Korea -- the so-called ASEAN +3 -- and India on Saturday. That group will then be joined by Australia and New Zealand on Easter Sunday for the full-blown "East Asia Summit."
China and Japan are the world's biggest creditors, holding nearly $3 trillion between them in foreign exchange reserves, which theoretically at least gives them considerable clout over any plans to reform the global financial architecture. Beijing and other emerging market economies such as India certainly want their voices heard.
"Japan is beginning to give up the leading role in Asia to China," said Hidehiko Mukoyama of the Japan Research Institute. "I don't think there is any doubt that China will tend to take the leading role at the summit."
The export-dependent economies of East Asia have begun feeling the pain of the financial crisis, with the Asia Development Bank forecasting economic growth will nearly halve to 3.6 percent this year.
The agreements reached at the G-20 summit have eased some of the pressure on East Asian leaders to do more -- most have already adopted expansionary monetary policies and economic stimulus programs.
"If there was nothing done at G-20 and the world economy continued to go into freefall, the East Asia members would be forced to think up something on their own," said Thitinan Pongsudhirak, a foreign affairs lecturer at Bangkok's Chulalongkorn University.
Japan, South Korea and China will meet on the sidelines of the summit to talk about how to restart stalled nuclear talks with North Korea after the rocket launch, which analysts say may embolden the North to ask for more concessions.
The leaders will likely talk about pushing forward with a vast free trade area that could eventually stretch from Beijing to Sydney and from Manila to New Delhi -- even as they watch each other take stealthy steps toward trade protectionism.
"There's a lot of de-globalization going on right now; protectionism is increasing," said Anton Gunawan, chief economist for Indonesia's Bank Danamon. Continued...
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