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As China slows, Asia to pick up: ADB

HONG KONG--Growth in the developing economies of Asia will edge higher as the recovery in rich countries helps the region weather the slowdown in China, the Asian Development Bank said Tuesday.

The region's 45 developing or newly industrialized economies, not including Japan, will expand 6.4 percent in 2015 after growing 6.2 percent this year, the ADB said in its annual Asian Development Outlook report. Last year the region grew 6.1 percent.

The recovery in the U.S., Japan and countries using the euro will result in stronger demand for Asia's exports. However, that will be offset “somewhat” by slowing Chinese growth, the report said.

The Manila-based lender said the world's second biggest economy will expand 7.5 percent this year, slowing to 7.4 percent in 2015 as Beijing cracks down on a lending boom and refocuses the economy away from investment in favor of domestic consumption.

The ADB warned of three risks to the outlook.

If China's efforts to rein in its credit boom are “too abrupt and excessively undermine growth,” the slowdown could be deeper and hurt its trading partners. Also, mixed data from industrialized economies raises the possibility that demand for Asian exports could be weaker than thought.

Also, a “further shock” to global financial markets from changes in U.S. monetary policy cannot be ruled out, ADB said in a reference to the Federal Reserve's move to gradually scale back its unprecedented monetary stimulus.

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Pedestrians cross a busy street in Hong Kong on Tuesday, April 1.

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