Smaller but dynamic economies in Southeast Asia, such as Vietnam, the Philippines, and Indonesia, are also contributing to the region’s growth. These countries benefit from factors like a large labor force, increasing foreign direct investment (FDI), and growing domestic consumption. For example, the Philippines is projected to achieve a growth rate of 6.1%, and Indonesia 5.1% in 2025. The report also pointed out that the overall unemployment rate in Asia in 2025 is expected to be 4.39%, lower than the global average of 4.96%. As the economy recovers and inflation eases, the real income level in Asia is expected to rise. This is important for improving the living standards of the people in the region and further stimulating domestic consumption, which in turn will support economic growth.

The global economic situation is currently clouded by various uncertainties. Trade protectionism, geopolitical tensions, and the slowdown of the global economic recovery have all had an impact on Asian economies. For example, the trade disputes between major economies can disrupt the global supply chain, which is particularly harmful to Asian economies that rely heavily on exports and trade – related industries. Central banks in Asian countries face challenges in formulating and implementing monetary policies. On one hand, they need to support economic growth through measures such as interest rate cuts and quantitative easing. On the other hand, they also need to pay attention to potential inflationary pressures and the stability of the currency exchange rate.

The situation in Thailand is a case in point. The Thai central bank governor, Kittipong Kittiratt, said in an interview that the external forecast for Thailand’s economic growth rate this year has dropped from the original 2.9% to 2.4%, indicating certain fragility in Thailand’s economic growth. “The Thai central bank cut interest rates some time ago, which was a necessary move. And for now, the threshold for us to take additional regulatory measures is quite high.” The decision to cut interest rates was aimed at stimulating economic growth, but it also brought concerns about the impact on the currency’s value and potential capital outflows.

Some Asian economies may have vulnerabilities in their financial systems, such as high levels of corporate debt, over – reliance on foreign capital, and relatively weak financial supervision. These vulnerabilities can make the economies more susceptible to external shocks. In the event of a sudden change in the global financial environment, such as a significant increase in interest rates in developed economies, it may lead to capital outflows from Asian economies, putting pressure on their currency exchange rates and financial stability.

At the sub – forum, Xu Changneng, the vice – governor of the People’s Bank of China, made it clear that China’s position of implementing a moderately loose monetary policy is firm. From a quantitative perspective, China’s monetary policy is supportive. The growth rates of broad money (M2) and the social financing scale are both higher than the nominal GDP growth rate, indicating that the financial sector is providing strong support to the real economy. In terms of price, the financing costs of enterprises have decreased significantly in recent years and are at a historical low. This year, the explicit adoption of a moderately loose monetary policy orientation reflects the continuity of policies.

China is gradually reducing its emphasis on quantity – based targets and transitioning to a price – based regulatory model. The 7 – day reverse repurchase rate in the open market has been clearly defined as the policy interest rate, while the policy color of the medium – term lending facility (MLF) rate has been weakened. Recently, the MLF operation has been adjusted from single – price bidding to multi – price bidding, and its interest rate no longer has the nature of a policy rate. This adjustment is aimed at making the interest rate system more market – oriented and improving the efficiency of monetary policy transmission.

China will give full play to the dual functions of monetary policy tools in terms of both quantity and structure. By using various structural monetary policy tools, banks are guided to increase support for areas such as inclusive small and micro enterprises, green finance, technology finance, and pension finance. In 2025, two key measures will be implemented: first, the launch of the “technology board” in the bond market to guide low – cost funds directly to the technology field; second, expanding the scale and scope of the scientific and technological innovation re – loan, reducing interest rates, simplifying the approval process, and strengthening the investment of social capital in scientific and technological innovation.

In the face of the uncertainty of the external environment, China emphasizes the importance of strengthening policy communication and coordination. The People’s Bank of China will enhance communication to deal with the uncertain environment with a clear policy orientation and effectively stabilize market expectations. Li Bin, the deputy director of the State Administration of Foreign Exchange of China, shared insights on China’s foreign exchange management and capital flow situation. Since February, foreign capital has significantly increased its holdings of RMB assets. In February, foreign investors net – bought 12.7 billion US dollars of domestic stocks and bonds, and this trend has continued in March. This reflects international investors’ confidence in the Chinese economy and their recognition of RMB – denominated assets.

In recent years, the State Administration of Foreign Exchange has been committed to improving the foreign exchange management system that is “more convenient, more open, and more secure,” continuously promoting the liberalization and facilitation of cross – border trade and investment, and creating a foreign exchange use environment of “the more trustworthy, the more convenient.” While expanding opening – up and enhancing facilitation, it always adheres to risk prevention and better coordinates development and security. Currently, the foreign exchange hedging ratio of enterprises is around 27%, and the cross – border payment and receipt ratio of the RMB in the goods trade sector has approached 30%, both at historical highs, indicating that enterprises’ ability to cope with exchange rate fluctuations has significantly improved.

Looking ahead, the State Administration of Foreign Exchange will continue to promote in – depth reforms and high – level opening – up in the foreign exchange field, deepen regional economic and trade cooperation, and improve the “macro – prudential + micro – supervision” two – in – one management framework of the foreign exchange market. It will effectively prevent and resolve external shock risks, maintain the balance of international payments, and keep the RMB exchange rate basically stable at a reasonable and equilibrium level.

In addition to domestic policy adjustments, Asian economies also recognize the importance of regional and international cooperation in maintaining monetary and financial stability. Since 2020, ASEAN has become China’s largest trading partner and an important destination for China’s foreign direct investment. The two sides have broad cooperation prospects in trade, investment, and finance. For example, in the area of trade settlement, promoting the use of the RMB in ASEAN – China trade can reduce currency conversion costs and exchange rate risks for enterprises on both sides, and also promote the internationalization of the RMB. Multilateral financial institutions such as the Asian Development Bank (ADB) and the International Monetary Fund (IMF) play an important role in providing financial support and policy advice to Asian economies. These institutions can help countries in the region to deal with financial crises, improve the stability of the financial system, and promote economic development through measures such as providing loans, technical assistance, and policy coordination.

Based on the current trends and policy responses, it is likely that Asia will maintain its position as a major driver of global economic growth in the coming years. The growth of emerging economies in Asia, supported by domestic market expansion, technological innovation, and infrastructure construction, will continue to contribute to the region’s economic development. For example, countries along the Belt and Road Initiative can achieve complementary advantages through infrastructure connectivity, trade facilitation, and financial cooperation, further promoting economic growth.

With the implementation of appropriate monetary policies and the improvement of financial supervision systems, Asian financial markets are expected to remain stable overall despite fluctuations. The development of financial markets, such as the growth of the bond market and the improvement of the stock market, will provide more financing channels for enterprises and promote the efficient allocation of resources. The launch of the bond market “technology board” in China, for instance, is expected to attract more capital to the technology – intensive industries, promoting their development and innovation.

However, challenges and risks still exist. The global economic situation remains complex and volatile, and new uncertainties may emerge at any time. Geopolitical tensions may disrupt international trade and investment patterns, and changes in the monetary policies of major developed economies may also have a spill – over effect on Asian economies. Asian countries need to closely monitor the international economic and financial situation, strengthen policy coordination, and continuously improve their ability to resist risks.

The discussions at the Boao Forum 2025 on monetary and financial stability in Asia have provided valuable insights and directions for policymakers and market participants. Asian economies, while facing challenges, also have great development potential. Through appropriate policy adjustments, enhanced financial supervision, and strengthened regional and international cooperation, Asia can achieve sustainable economic growth and maintain monetary and financial stability in an unstable world. The key lies in the joint efforts of all countries in the region to address risks and opportunities, and to jointly promote the prosperity and development of the Asian economy. As the global economic landscape continues to evolve, Asia’s role and contribution will become increasingly important.

By Yuan Lei