Manila, September 6 :

China and India are expected to push developing Asia’s economic growth to a better than expected 7.7 per cent this year despite high oil prices, the Asian Development Bank (ADB) said in a report here today.

The forecast is contained in an update of the Philippines-based lender’s annual publication, the Asian Development Outlook, which shows the 2006 forecast was raised from 7.2 per cent to 7.7 per cent and the 2007 forecast to 7.1 per cent from seven per cent.

The outlook ‘is supported by strong performances by China and India, since together these two economies account for over 50 per cent of regional gross domestic product (GDP),” it stated. Chief ADB economist Ifzal Ali urged to pursue reform initiatives more vigorously while the boom times last. Falling investment rates across the region except for China and Vietnam suggest that “investor perceptions of governance and public sector performance are weak, and the business climate offers much scope for improvement,” the report stated.

It cited endemic poor infrastructure, including power outages and poor roads that curb returns on capital, while Ali singled out costly oil subsidies that could “lead to major problems in macro-economic management.” China’s economy, which grew at 10.9 per cent in the six months to June is now expected to grow by 10.4 per cent for the year and 9.5 per cent in 2007, higher than the ADB’s original forecasts of 9.5 per cent and 8.8 per cent, respectively.

India’s 2006 growth forecast was upgraded by 0.2 percentage points to 7.8 per cent amid buoyant export growth, while the 2007 forecast of 7.8 per cent was maintained.

“The remaining economies of Asia are expected to grow by more modest averages” of 5.5 per cent this year and 5.1 per cent in 2007, it added. The updated 2007 forecast ‘is predicated on generally favorable external conditions’ while factoring in tighter global liquidity, softer growth in the industrial countries, and ‘oil prices staying high.’ However, it warned that if elevated terrorist threats persist and disrupt international travel “this would clearly be a negative factor,” especially on tourism-dependent countries like the Maldives and Thailand.

East Asia grew at a fast tempo and this should hit 8.2 per cent for the whole year, it said, reflecting greater than expected strength in fixed asset investment and exports in China, which also lifted Hong Kong.

South Asia should grow by 7.5 per cent this year after averaging 7.7 per cent annually since 2002, outpacing Southeast Asia by about two percentage points and almost matching that of East Asia, it stated.

Singapore is friendly economy :

SINGAPORE: Singapore is the easiest country in the world to do business in, while China is rapidly simplifying business procedures to keep it ahead of India in the global rankings, the World Bank said. New Zealand is the second most business-friendly place, according to the annual ‘Doing Business’ report, which ranked 175 economies in terms of regulations that enhance or constrain business. — AFP

Biotechnology to boost GDP :

Beijing: A leading Chinese life scientist estimated that the output of China’s biotechnology industry will hit two trillion yuan ($250 billion), or five percent of GDP, in 2020. China would enter the top five countries in the world in terms of biotechnology industry scale, Zhang Yaping, a member of the Chinese Academy of Sciences , said in a speech at the ongoing Nobel Laureates Beijing Forum 2006. — Xinhua