The international financial crisis, which has spread to most economies in the world, including those in the Asia-Pacific Rim, is expected to top the agenda of the upcoming APEC Economic Leaders' Meeting.
The meeting, scheduled for Saturday and Sunday, comes when Japan, the world's second largest economy and a member of APEC (Asia-Pacific Economic Cooperation), contracted at an annual pace of 0.4 percent in the July-September period. That's after degrading an annualized 3.7 percent in the second quarter, according to official statistics released Monday.
That means Japan is now technically in a recession, commonly defined as two straight quarters of contractions.
Japan's situation showed that the global financial crisis is increasingly affecting the 21 member economies of APEC, a bloc that accounts for about 41 percent of the world's population, roughly 55 percent of the world's GDP and about 49 percent of international trade.
Financial issues top agenda of APEC leaders' meeting
The upcoming summit was designed to discuss such topics as global economic issues, APEC's support for the Doha Round talks of the World Trade Organization, APEC's regional economic integration, corporate social responsibility, human security and structural reforms.
As the financial crisis has caused additional losses in additional countries, including several APEC members whose governments are busy launching bailout packages, topics such as how the crisis will impact APEC economies and how to respond to the upheaval have emerged as the meeting's most prominent issues.
The United States, an APEC member and birthplace of the crisis, has suffered great losses in the crisis. Last summer's sub-prime mortgage crisis escalated into the current financial turmoil which has dealt a heavy blow to American stocks and market confidence.
According to the International Monetary Fund's latest prediction, the U.S. economy is likely to fall into a recession next year with a 0.7 percent negative growth.
Other developed APEC member economies, including Canada and Australia, which enjoy close economic and trade ties with the United States, have been pushed to front-line losses marked by sharp falls in stock markets and large depreciations in high-risk assets owned by banks.
For the developing APEC members, emerging ones in particular, the crisis is also expected to cause a difficult situation, analysts said.
The crisis already has struck a heavy blow to the exports of developing economies by sharply reducing overseas demand for their products and export credit. A decrease in foreign direct investment and the out-flow of capital have also frustrated the developing members' stock markets and led to the devaluation of their currencies. That situation has been experienced by such APEC members as Russia, Mexico, South Korea, Indonesia and Thailand.
How APEC can help
The upcoming APEC meeting, which comes less than 10 days after the historical G20 financial summit, will be a very "good opportunity" for leaders of the world's top economies to review the current global situation, Bob Buckle, chairman of the APEC Economic Committee, told reporters Tuesday.
Buckle expected the weekend gathering to be a platform for leaders from the APEC economies to discuss their experiences on how to deal with such grave challenges as the sharp drop in global demand and investment.
Buckle noted that the APEC Economic Committee is due to release its annual economic policy report Thursday.
The 2008 APEC Economic Policy Report will explain how a sound competition policy, based on the diverse economic, institutional and legal conditions of each economy, can improve economic performance, a move that can help APEC members in the financial crisis, Buckle said.
Analysts said the summit will work out additional measures to coordinate APEC members' monetary and financial policies to better deal with the crisis.
(Xinhua News Agency November 20, 2008)