Asia to lead global economic recovery in 2011: HK banker

HONG KONG, Jan. 5, 2011 (Kyodo News International) -- Asia will likely see better economic recovery in 2011 as the United States and European countries continue to struggle, while the liberalization of China's currency will remain the topic of greatest concern, veteran Hong Kong banker Benjamin Hung said Wednesday.

Briefing the media on the upcoming Asian Financial (NYSE:DYP) Forum to be held here, Hung, the chief executive officer of Standard Chartered Bank (Hong Kong), predicted the global economy will recover on a ''steady but gradual'' basis, with Western economies growing below 2 percent and Asia showing a strong growth of 6-7 percent, powered by China.

''The road remains bumpy and the market will remain volatile, but I do think the world should hopefully be regaining more confidence and going through more gradual and steady pace of economic growth,'' Hung said.

The United States has been pressuring China to let the yuan appreciate significantly to offset trade imbalances between the countries. Beijing has insisted on a controlled currency rate rise to prevent negative impact on its export.

''The whole process of liberalization of renminbi (yuan) will probably be one of the biggest developments in the next decade. China is the second largest economic body in the world which is very connected with the world through trade, textiles, etc., but not connected with the world by its currency financially,'' Hung said.

The annual forum, to be held on Jan. 17-18, has invited speakers from financial sector and government officials of different countries including Japan.

Three dozen representatives from 25 Japanese companies mainly of venture capital and private equity firms will be attending the forum in a mission led by Japan's Ministry of Economy, Trade and Industry for the first time.

''Japanese investors are very conservative and are reluctant to invest their money in these challenging enterprises,'' said Minoru Suzuki, director general of the Japan External Trade Organization in Hong Kong.

Suzuki said the forum can help these small companies draw investment from Asian investors, in light of an anticipated economic slowdown in 2011 during which Japan's economic growth is forecast to drop from around 3 percent last year to 1.5 percent this year, as the rising currency exchange rate is hurting export.

Source: www.istockanalyst.com