The growing economic power of China also saw a more dynamic intra-regional trade. Chinese manufacturing firms went on a buying spree as prices softened and stockpiled on electronics and raw materials they procured from South Korea and Southeast Asian countries.

"Developments in East Asia remain strongly influenced by China. Take China out of the equation, and the rest of the region is recovering with less vigor," the World Bank said in the East Asia and Pacific Update issued November.

"As companies began replenishing depleted inventories, those based in China as part of global supply chains restocked parts and components used for the assembly of electronics products bound primarily for the G-3 countries," the World Bank said.

The rebound in exports and domestic consumption pushed the region towards recovery. The ADB estimates that the combined gross domestic product (GDP) of the ten largest economies in emerging East Asia (including China, South Korea and Indonesia) grew 5 percent on year in the third quarter of 2009 -- well above growth rates in the previous three quarters.

But analysts noted that the early signs of growth won't necessarily translate to a long term recovery. As U.P.'s Paderanga noted, the growth of export-led Asian countries is still "hinged on the recovery of developed countries in 2010." There are no indications yet that the crisis that crippled US and European economies is finally over.

"The recovery in the G3 is still soft and there are a number of downside risks," ADB economist Lee said.

Analysts are also concerned that Asian governments' may withdraw favorable policies even if their respective economies have not fully recovered. Fiscal stimulus packages are quite costly, and those with inadequate fiscal space may not be as willing to continue with the stimulus package.

"Developing Asia is heading towards full recovery. What could blunt this would be an early exit to stimulate fiscal and monetary policy," said Victor Abola, economics professor at the University of Asia and the Pacific.

ADB's Lee said that while a V-shaped recovery is now underway, it's essential that fiscal and monetary stimulus "remain accommodative where possible to put economies on a sound footing."

"A key challenge for each economy will be to carefully time when best to rollback the stimulus to ensure sustained recovery but avoid both excessive inflation and hefty fiscal shortfalls," he said.

(Xinhua News Agency December 22, 2009)