Despite negative energy impact on Asia, Pacific, China remains major support for global growth: IMF

Asia's economy remains resilient at the start of the new year, but a new round of energy shocks will have a negative impact on Asia, an International Monetary Fund (IMF) official said on Thursday.

Given the region's high fossil fuel intensity and heavy reliance on conflict-affected commodity markets, the new energy shock will have a negative impact, Krishna Srinivasan, director of the International Monetary Fund (IMF)'s Asia and Pacific Department, said at a press briefing during the 2026 Spring Meetings of the IMF and the World Bank Group.

Srinivasan noted that growth in most Asian economies has turned out stronger than expected in late 2025.

The IMF official said that oil and gas prices have risen sharply as a result of the war in the Middle East, highlighting Asia's high exposure to energy shocks due to its energy-intensive economies, heavy reliance on imported fuels, and vulnerability to disruptions in related inputs such as fertilizers and petrochemical products, which could further strain supply chains if the conflict persists.

He specifically pointed out that despite multiple external shocks, the Chinese economy has continued to demonstrate remarkable resilience, and China's economic growth will have positive spillover effects on other regions of the world.

"In the past, we have done the estimates. So one percentage point increase in China's growth translates into a 0.3 percentage point pickup in growth in emerging markets across the world, including in Asia. So, China is clearly a driver of growth. And what we also see is the sectors where there are significant supply chain links with China. Those sectors and those countries do much better. So the ASEAN (the Association of Southeast Asian Nations) countries do better. But overall I would say that when China does well, the region does well, the world does well," said Srinivasan.

Despite negative energy impact on Asia, Pacific, China remains major support for global growth: IMF

Despite negative energy impact on Asia, Pacific, China remains major support for global growth: IMF

A Chinese Defense Ministry spokesman on Friday lashed out at Japan's latest sharp increase in defense budget and planned revision of defense equipment transfer principles to allow the export of lethal weapons, urging the country to make a clean break from militarism.

It was reported that the Japanese parliament has enacted a record-high budget for fiscal year 2026, featuring a defense expenditure of 9.04 trillion yen (about 58 billion U.S. dollars), exceeding 9 trillion yen for the first time. Reports also indicate that the Japanese government is planning a significant revision to the implementation guidelines of its "Three Principles on Transfer of Defense Equipment and Technology," which will allow the export of lethal weapons.

Speaking at a press conference in Beijing, Senior Colonel Zhang Xiaogang, the spokesman, said in response, "Various signs have shown that the Japanese right-wing forces are stepping up efforts to push the country's security policy to shift toward a more offensive and expansionist direction. Their acts gravely violate the [1943] Cairo Declaration, the [1945] Potsdam Proclamation, the [1945] Japanese Instrument of Surrender, and other instruments with legal effect under international law, gravely go against Japan's own Constitution and existing domestic norms, and pose a serious threat to the post-war international order and regional peace and stability."

"Japanese militarism once inflicted untold suffering on the region and beyond, yet there has never been a proper reckoning with it after World War II," Zhang said.

Now, the Japanese side has completely torn off its disguise and accelerated its pace of re-militarization, which cannot but arouse strong concern and condemnation from the rest of the world, the spokesman said.

"We urge the Japanese side to stop its retrogressive moves and make a clean break from militarism. Otherwise, it will lose the trust of its Asian neighbors and the rest of the international community," he said.

China urges Japan to break away from militarism