Asia's powerhouse economy will rebound with 8.4pc growth next year as credit stimulus and an infrastructure blitz by local governments gain traction, with knock-on effects through East Asia. The region as a whole will grow by 7.9pc, with Myanmar at last starting to catch up as undertakes "formidable reforms".

The new risk is a return to overheating as ultra-loose monetary policies in the West trigger a "flood of capital into the region that could lead to asset bubbles and excessive credit growth" -- with the risk of sharp reversals later.


The Bank said Asian states should defend their economies from excess money printed by central banks in the US, Europe, and Japan by imposing short-term "capital controls" when needed. It added that exchange curbs are no substitute for "appropriate exchange rate arrangements" over the longer term, a criticism clearly directed at China's dollar peg.

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