The Asia-Pacific region, excluding Japan, is expected to grow at an annual average of 5.6 percent between this year and 2007, becoming the world's fastest growing region. Aside from China and India, the rest of Asia will expand only modestly, according to analysts Economist Intelligence Unit (EIU).
China's economy is projected to grow 7 percent this year despite the impact of SARS as export volumes continue to expand and domestic demand is strong. India, on the other hand, should grow at an average 5.9 percent in this fiscal year and 6.7 percent in the fiscal year of 2004-2005, and will be driven largely by the services sector.
In the meantime, the rest of Asia is expected to show only moderate or weak economic growth over the next few years, said the report.
As China and India ascends to IT prowess, more technology companies will shift their operations to the mainland to take advantage of lower labour costs and the country's booming economy.
Last month, aircraft electronics maker Honeywell decided to move its regional headquarters from Singapore to Shanghai. Customer proximity and China's significant presence in the region were reasons cited by Honeywell China's chairman and president, Francis Yuen, in a report from Bloomberg wire agency.
Business outsourcing sent out to India from U.S. and other firms will help the country soak up more than half the world's offshore business outsourcing revenue this year, according IT analyst firm Gartner. The country's revenue from BPO will grow from slightly under US$1 billion in 2002 to US$1.2 billion in 2003 and will represent 66 percent of the offshore BPO (business process outsourcing) market.
Demand in the technology industry has improved over the last half year, but remains stagnant in comparison to the strong growth rates seen in the late 1990s. Therefore, acting as a brake on the important Asian technology industry, reported the EIU.
Up until the 1997 economic crisis, the Asian tiger economies of Singapore, Malaysia, Indonesia and Thailand were thought to be the main drivers of the Asian economy.
