Global crisis to hit China more than India, says ADB

Multilateral lending agency Asian Development Bank (ADB) on Saturday said that the impact of global financial meltdown will be much more on China than India as the Chinese economy is heavily dependent on exports.

"The extent of slowdown in China is much bigger than India because Chinese economy is more dependent on exports than Indian economy," ADB President Haruhiko Kuroda said in an interview to a news channel, adding that both China and India were not in recession.

Developing countries will have to restructure their economy and generate domestic demand besides sustaining high growth to avoid poverty, he said.

Even if the global economy recovers from the worst recession, global economic structure will be changed considerably and particularly Asian countries cannot rely on exports, he said.

Emerging economies will slowdown with negative impact on poor and Countries will have to sustain high growth to avoid poverty, Kuroda said.

The global downturn may be deeper and the recovery take longer than earlier expected, he said adding, developing Asia would not have miracle growth and further slowdown this year will be inevitable. However, Indian economy was expected to grow at around 7 per cent.

The Bank plans issuing 9-10 billion dollar bonds in the market this year. "In the next 12 months we can easily raise 9 to 10 billion dollar from capital markets Recently we issued one billion dollar bond and market response was very good", Kuroda said.

ADB yesterday announced stepping up its lending operations by several billion dollars to help Asian nations tide over the crisis.

In addition, the bank would increase the size of trade facilitation programme from $150 million to $1 billion in 2009.

The Manila-based bank facing resource constraint, however, has requested shareholders for an immediate and substantial capital increase for steps to mitigate the severity of the economic crisis in the region.

Agencies