Source: Taiwantrade | Updated: 28 October 2010
"East Asia remains the fastest growing world region," said the bank, pointing out that sales of flat-screen TVs, automobiles and even Bordeaux wines in East Asia are now the largest for any region in the world.
The report on East Asia's developing economies -- which excludes Japan, South Korea, Singapore, Hong Kong and Taiwan -- said China remains the region's economic powerhouse, with projected growth of 9.5 percent in 2010.
However, confidence in developing East Asia has triggered a flood of liquidity in search of higher yields, said the World Bank in its latest East Asia and Pacific Economic Update report released in Tokyo.
"The large increase in inflows, driven by abundant global liquidity and low yields in advanced countries... has been mainly responsible for a substantial appreciation of exchange rates," the report said.
The surge in capital inflows has "caused exchange rates to appreciate strongly," the bank said, pointing out that in real effective terms, regional exchange rates are 10-15 percent stronger than before the crisis.
"Appreciating exchange rates so far have not crippled the recovery, but further appreciation will bear close watching," the report said.
"So far, export growth has remained robust, but with continued real appreciation of East Asian currencies, this growth could slow."
The World Bank report came as fears are rising of a "currency war," in which nations, seeking to export their way out of the downturn are trying to cap or lower their currencies to make their exports more competitive.
The bank said that "developed and developing countries worldwide are bent on avoiding stronger exchange rates, as concerns about weak foreign demand -- and a limited scope for exports to boost growth -- intensify."
The report urged regional debate at a Hanoi summit in October, saying "the issues need to be discussed in the context of ASEAN and ASEAN+6, where member countries could fashion a common approach to these regional challenges."