Chinese Premier Li Keqiang's announcement of a lowered growth target for the next three years has dialled down expectations for the world's No. 2 economy, upon whose coat-tails many were riding. Rather than a fixed figure, he has sensibly indicated a range - 6.5 to 7 per cent expansion. Alongside this, he presented what looks like realistic targets of job creation. This takes into account the shedding of millions of workers as the huge economy is forced to shape up after growing fat on infrastructure spending that's boosted everything from steel to cement production. Hopefully, a hard landing for the economy will be avoided. The world will just have to be patient as China moves from an investment-led model to one led by domestic consumption. Unlike his predecessor, Mr Zhu Rongji, who operated in a different era, Mr Li cannot move much faster.
Meanwhile, in India, Asia's No. 3 economy, things are looking a little better. Firing off a lower base, the economy has clocked a 7.4 per cent expansion for the fiscal year despite a bad monsoon impacting on agriculture, on which more than half of Indians depend for livelihood. Low oil prices - India imports 70 per cent of its oil needs - have tamped down on inflation and helped improve the trade balance. Favourable weather this year could further lift prospects for the economy, feeding demand for everything from gold to consumer electronics and motor cars. Recent bank lending data shows credit offtake rising for both manufacturing and services sectors.
What should the rest of Asia, Asean particularly, make of all this? First, a dose of realism is due. The age of breakneck growth of gross domestic product is over. Trade, on which many of the regional economies built their success, and to which some of the newly industrialising ones aspire, is showing signs of a secular slowdown. Second, the big economies - China and India, particularly - are lengthening their domestic supply chains, trying to get more done at home. This will weigh on the exports of other nations. Third, the rapid onset of automation will impact every economy, but especially those with labour forces that cannot keep pace with technology and whose productivity does not rise in tandem with labour costs.
The aim, therefore, should not be to stall these trends - because that is not really possible - but to get ahead of the curve. A commitment to open markets, continuous upgrading of skill sets, and closer regional integration is the need of the hour. Open skies will help boost connectivity that will spur tourism, one of the greatest job-creators. Not just China, every other nation too will need to strive to boost consumption as a growth driver as markets evolve. Vast infrastructure gaps in many nations offer another opportunity for productive investment. Instead of just grasping giants' coat-tails, they should seize the day.