According to the latest World Bank figures, growth in the developing economies of East Asia and the Pacific--a region that includes 23 countries, including China, Vietnam, the Philippines, Malaysia, Indonesia, Thailand and Mongolia--will reach 5.1% in 2023, compared with 3.5% in 2022. This rebound is down to the reopening of the Chinese economy, which will see its growth rise from 3% last year to 5.1% this year.

While China is returning to growth, almost all of the other countries in the zone will enter a slowdown. Their growth is expected to fall from 5.8% in 2022 after the covid crisis to 4.9%. The World Bank blames this slowdown on inflation and high household debt in some countries, which weighs on consumption.

Call for reforms

The region’s economic performance, while robust, could be held back this year by slowing global growth, high commodity prices and tighter financial conditions in response to persistent inflation, the World Bank said.

Looking back over the past two decades, the World Bank noted that countries in the East Asian Pacific (EAP) region have experienced two decades of higher and more stable growth than economies in other regions. “The result has been a striking decline in poverty and, over the past decade, a decrease in inequality. However, the catching up to the per capita income levels of advanced economies has stalled in recent years due to the slowdown in productivity growth and the pace of structural reforms.”

It added: “Addressing the large reform gap, particularly in services, could amplify the impact of the digital revolution and boost productivity in sectors ranging from retail and finance to education and health.”

Three major challenges in the medium term

For the Washington experts, the region’s economies face three major challenges. First, there are economic and political rivalries between China and the United States and, more broadly, growing tensions between major trading partners that “will affect trade, investment and technology flows in the region.” Said the World Bank: “bilateral restrictions on technology flows and collaboration, which can reduce global access to knowledge, are the most serious problem.”

The second challenge is a demographic one: “the rapid ageing of the major economies of East and Southeast Asia heralds a new set of challenges and risks with implications for economic growth, fiscal balances and health.” Finally, the region is particularly exposed to climate risks, partly due to the high density of population and economic activity along its coasts.

“De-globalisation, ageing and climate change are clouding the growth prospects of a region that has thrived on trade and is ageing rapidly,” said Aaditya Mattoo, the World Bank’s chief economist for East Asia and the Pacific.

This story was first published in French on . It has been translated and edited for Delano.