The International Monetary Fund (IMF) has warned that Asia is likely to suffer the greatest damage as tensions escalate due to the Chinese military's 'Taiwan encirclement' military exercises.
Krishna Srinivasan, IMF Asia-Pacific Director, said in an interview with Bloomberg TV on the 12th (local time) that the 'geopolitical fragmentation' crisis has significantly emerged over the past five years, noting that "vulnerabilities have become particularly pronounced due to the Ukraine war."
He emphasized, "If such a crisis occurs, Asia will be the region that suffers the most damage in the world."
As evidence, Srinivasan cited China's military threats following meetings between Taiwan President Tsai Ing-wen and U.S. House Speaker Kevin McCarthy. He raised his voice, warning that Taiwan could turn into a powder keg of international conflict at any time.
The Chinese People's Liberation Army last week deployed 91 military aircraft and 12 warships around Taiwan, conducting high-intensity shows of force.
Nevertheless, he assessed Asia as the region with the highest growth potential in the international economy.
Earlier, the IMF projected the Asia-Pacific region's growth rate for this year at 4.6%, an upward revision of 0.3% from the forecast made in October last year, assuming China abandons its 'zero-COVID' policy.
Srinivasan said, "China is recovering faster than we expected," and emphasized the need to focus on liquidity and the consumption sector.
He added, "20% of Asia's exports are directed to the U.S. and Europe," and said, "Although the recovery is somewhat slow, China will be able to manage it sufficiently."
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