Reference News Network, July 29 report: The Japan Economic News published an article titled "If We Don't Open Our Borders, Growth Will Be Impossible" on July 27. The full text is as follows:

We are entering a "Trump 2.0" era — many things once considered self-evident are being overturned. How should Asia, the world's growth center that has developed through export-oriented strategies, find a way out? Shigeto Kanda, who took office as President of the Asian Development Bank in February, believes that when the world faces increasing uncertainty, it is more important to promote reforms to open borders.

The Japan Economic News asked: You became the president of the Asian Development Bank at a time when the Trump administration caused chaos.

Shigeto Kanda replied: I often mention "unprecedented uncertainty." Changes in geopolitical balance have caused turbulence in the international order, and coupled with the shift in U.S. policy, these factors have led to a world that is completely different from before. The world before the Trump era cannot be regained.

After taking office, I held meetings with leaders of about 20 countries. The consensus we reached is that the current turbulent situation in the world is because the old model over-relied on various things; countries must turn this crisis into a chance for reform, build more resilient domestic and regional economies, and reshape a better world order.

Question: The Trump tariff policy has had a significant impact on the Asian economy. Does this mean that Asia is overly dependent on the U.S.?

Answer: Many people have reflected on the lessons of over-relying on the U.S. consumer market. Strengthening the domestic markets of Asian economies is an important issue, and diversification is the key. We must expand industrial structures, trade partners, and supply chain networks, and also deepen capital market reforms and promote the use of local currencies. The Asian Development Bank is also committed to improving regional connectivity and has announced funding support for the "ASEAN Grid" construction.

Question: Before taking office, you called for expanding private investment. The Trump administration's tariff policy is unpredictable. How will this affect private investment?

Answer: One of the biggest problems is that companies cannot make proper judgments, leading to delays in investment. In financial markets, investors are becoming more risk-averse, and volatility is increasing. Countries also need to deal with the risks of capital outflows and excessive exchange rate fluctuations.

On the other hand, during exchanges with business leaders and investors around the world, I can feel their optimistic attitude. Some are breaking existing interest groups in the process of restructuring supply chains, while others are creating new business opportunities. Countless examples show that people are keenly seizing new investment opportunities.

In the United States, the discontent of the middle class and working class is high, and movements against the ruling class are spreading across the country. In other countries, similar populist trends are intensifying. However, most countries do not ignore this, but take it seriously as a reality.

Question: Asian emerging countries still have many non-tariff barriers. Can countries really push forward reforms such as deregulation?

Answer: Most Asian leaders take it seriously. Although there are various obstacles, I can feel their determination to break through the reform bottlenecks with the current momentum. They know that relying on short-term tricks won't last long, and many countries are pushing forward difficult domestic reforms.

Protecting the right path of the economy is implementing sound macroeconomic policies. Fiscal policy must achieve sustainability to maintain market confidence and enhance crisis response capabilities; monetary policy should try to return to normal. Otherwise, when a crisis strikes, they will be unable to cope and could become prey to speculative capital.

Question: To reduce the risks of relying on China, major companies are actively dispersing production, and under the "China +1" investment strategy, ASEAN has rapidly emerged as another investment destination besides China. However, the U.S. has imposed high tariffs on Asian countries.

Answer: "China +1" has become a detour route for Chinese goods to be exported to the U.S. through Southeast Asia. Now, all parties are reflecting on the vulnerability of this mechanism. In the future, we need to carry out diversified layouts, not only targeting the final consumer market, but also expanding sources of raw materials and intermediate goods supplies.

The basic strategy of "China +1" remains effective now. This is because, from the perspective of population structure and political stability, Asia is still the best investment destination in the world.

This is not limited to internal integration within the ASEAN region. Asia also needs to sign trade agreements with external partners such as Europe that have higher degrees of freedom. The Asian Development Bank Annual Meeting was held in Italy in May, and several European leaders stated, "We hope to connect Asian and European markets." Europe also sees Asia as its largest growth market.

I firmly believe that if we don't open our borders, we will lose the opportunity for growth. We must expand domestic demand, relax regulations, invest in infrastructure, cultivate talent; promote regional integration, and expand trade partners — this is the direction in which countries are striving. (Translated by Ma Xiaoyun)

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