Laos Summit to Open as Region Regains Momentum

      Asian and European leaders are gathering in the world's most economically vibrant region just as it shows signs of regaining momentum, possibly taking up some of the slack for Western nations.

Government heads and senior deputies from 49 countries in Europe and the Asia-Pacific region open a two-day summit Monday in the tiny Southeast Asian nation of Laos, seeking to strengthen trade and investment ties and promote peaceful development.

But topping the agenda at the Asia-Europe summit, in the corridors of the capital Vientiane if not in the formal meetings, will be Europe's seemingly inexorable debt woes. Asian officials say they want the European leaders, including French President François Hollande and Italian Prime Minister Mario Monti, to explain how they plan to resolve the crisis engulfing Greece, Spain and other nations in one of Asia's top export markets.

The leaders are expected largely to duck Asia's long-standing territorial issues, which have recently worsened relations, especially Japan's ties with China and South Korea. China's premier, Wen Jiabao, has no plans to meet separately with Japanese Prime Minister Yoshihiko Noda, Beijing says. These once-customary bilateral summits have been on hold at global meetings in recent months because of the row over disputed islands.


Mr. Noda in September nationalized the Japan-controlled islands—which Japan calls the Senkaku and China calls the Diaoyu—sparking sometimes-violent protests across China and boycotts of Japanese products, notably cars.

The furor has eased in the past few weeks, and Mr. Noda, keen to move beyond the disputes, said last week he won't make an issue of the Senkaku in Vientiane. But prospects are dim for any Beijing-Tokyo progress soon: Mr. Wen is a lame duck, as the Chinese Communist Party begins a once-a-decade leadership change Thursday, while Mr. Noda, far behind in the polls, is under pressure to call a general election soon by a resurgent opposition that is holding vital spending legislation hostage.

Reflecting the concerns overhanging the Asia-Europe meeting as well as the likely lack of concrete progress on major issues at the summit, the Chinese government said only that Mr. Wen will talk in Vientiane about "China's view on current global economic and financial situations and policy suggestions to strengthen cooperation between Asia and Europe."

Mr. Noda, for his part, wants to press Europe to move ahead with free-trade talks, but little progress is expected there either, as individual European Union member countries haven't given negotiators the go-ahead and the EU remains unhappy with Japan's tariffs on agricultural products and cars, Japanese officials say.

Europe's financial markets have been calm recently, as the European Central Bank's offer of an unlimited backstop has curbed soaring bond yields in Spain and other weak economies. But Greece's fragmented parliament is to vote this week on €13.5 billion of austerity measures and a budget that Athens must pass to secure fresh aid and avoid running out of money within weeks. Euro-zone finance ministers are to discuss the crisis Thursday, but no decisions are expected.

By contrast, data last week offered hope that Asia is pulling out of an economic slowdown. Even though Japan appears to be relapsing with Europe into recession and Asia's improvement is patchy, manufacturing in China expanded for the first time in three months in October, suggesting the world's No. 2 economy remains on track to hit the government's 7.5% growth target this year. Exports from South Korea and Indonesia also picked up, indicating firmer overseas demand.

Southeast Asia—where landlocked Laos is starting to attract attention for its impressive growth and expanding integration with the global economy—remains robust, as firm domestic demand supplements uneven exports.

"Part of the reason why Southeast Asia has been more resilient in weathering the global slowdown is because this region is now more integrated than before," said Indonesiaan Vice Finance Minister Mahendra Siregar.

The region must build on this through greater economic and financial cooperation, strengthening the region's financial safety net and improving surveillance and social-security provisions, Mr. Siregar said in an interview at a recent meeting of Asia-Europe finance ministers preparing for the Vientiane summit.

The 10 members of the Association of Southeast Asian Nations "are some of the most dynamic and fastest-growing in the world, and this is likely to be the case for the next decade and more," said Jayant Menon, lead economist for trade and regional cooperation in the Asian Development Bank's office of regional economic integration.

Asean's newer members—Cambodia, Laos, Myanmar and Vietnam—are set to become increasingly open and export-oriented, with a larger share of manufacturing, while the older members focus their economies more on domestic demand and become more reliant on services, Mr. Menon said