"There's a natural debate about the role of China in the coming years. Is it an opportunity? Is it a threat?" World Bank vice president for East Asia and Pacific Jemal-ud-din Kassum asked at the launch of a book on East Asia's competitiveness.

"From our perspective, we come down on the side of very significant opportunities," he said.

Chinese imports' share of global gross domestic product is expected to double in the next five years especially after Beijing's entry into the World Trade Organization (WTO), he said.

Eight East Asian countries also saw their exports to China increase by 50 percent in the first half of this year, and while this may not be sustainable in the long-term, it is an indication of the opportunities.

"Our feeling is that China represents an opportunity because the challenge is to complement China, not necessarily to compete head on," he said, adding the opportunities lie in cross-border supply chains and regional production networks.

But he said East Asian economies must themselves carry on with reforms and liberalization measures if they are to make the most of the opportunities and complementary aspects offered by the Chinese market.

"China itself is in the process of transition. China itself, to meet the WTO challenge has to still undergo significant structural reforms in state enterprises (and in) the banking sector," he said.

He advised East Asian economies not to "lose a minute in playing their part to reform their own economies."

In the book, entitled Can East Asia Compete?, the World Bank allayed fears among neighboring countries that given China's vast labor force of unskilled and technical workers it will "forge an overwhelming absolute advantage" on a wide range of products.

"This is unlikely to be the case," the book said.

"A more plausible scenario is that a new geographic distribution of industry will emerge based on evolving comparative advantage," it said.

The book said China's economic weight and political presence "will surpass that of Japan in 15-20 years and will pose a challenge to that of the United States."

Such a transition will involve "major adjustments by all countries in the region, including China" itself.

East Asia's ability to break into the Chinese market depends on how neighboring countries "diversify their comparative advantage through measures to stimulate productivity and innovation in leading sectors," the book said.

(China Daily October 9, 2002)