Asian countries should make economic structural reform to maintain growth when facing headwinds blowing from the advanced countries, the president of Asian Development Bank(ADB) said Wednesday.

Haruhiko Kuroda, president of ADB, made a speech on how to deal with the situation created by euro crisis at the Hong Kong Polytechnic University (PolyU)'s 75th Anniversary Conference. He said that the unresolved euro crisis and the threatened U.S. fiscal cliff forced the biggest downside risks to the global outlook. Asian economies also feel the impact of the slowdown in the advanced economies. Growth rate in Asia's two regional giants, China and India, are slowing significantly.

Haruhiko said that the economic activities in major industrial economies remain weak. The United States failed to build the economy momentum, and euro area continues to contract. The recent activation of the European Stability Mechanism and introduction of Outright Monetary Transaction by European Central Bank have helped stabilized the global financial market to some extent.

"These efforts have had a positive effect on the market, boosting confidence and reducing the perceived risks from euro zone," he said. However, prospect of the euro zone is still uncertain.

The question facing Asia now is that what to do to overcome such a negative external environment. Haruhiko believed that Asian policy makers must focus on three issues, including macro responses to mediate the impact of the global slowdown, seeking growth sources to sustain growth momentum, and risk management through regional and global market coordination to enhance the resilience of Asian economies.

Haruhiko said that Asian economy is cooling more rapidly than the previous anticipation due to the pressure of the weak external environment. According to the recent Asian Development Outlook released by Asian Development Bank, GDP growth in developing Asia will slow from 7.2 percent in 2011 to 6.1 percent in 2012. But as long as the rate is above 6 percent, Asia growth prospect is still healthy.

As for other East Asian export-oriented countries, especially ASEAN economies, they remain resilient this year, but it is not certain whether they can immune to the slowdown of global economy and the region's two largest economies.

"Fortunately, most of the countries in the region have ample room to use monetary and fiscal tools to smooth out these external and internal shocks," he said.

In Haruhiko's view, Asian authorities should use the weak external environment as an opportunity to undertake structural reform to maintain Asian growth momentum. The slowdown of global economy highlights the fact that pursuing high growth through a heavy relying on exports is no longer sustainable.

Haruhiko perceived that with weakness in major industrial countries, the future growth environment is less favorable. Economies in this region must therefore adapt by speeding up the rebalancing process, improving productivity and efficiency.

Haruhiko said that in fact, since the outbreak of global financial crisis, Asia has achieved a significant progress in economy rebalancing. However, the rebalancing process still has a long way to go. Asia still needs to take structural reform for its own benefit, and take the opportunity to promote inclusive development and environmental sustainable growth.

In addition, according to Haruhiko, a more dynamic service sector is key to future growth in developing Asia. The sector is still dominated by traditional services such as restaurants, taxi drivers and so on. Modern services such as Internet connectivity technology, finance and other professional business services occupy less than 10 percent of Asian service economy, far less below the number of 20 to 25 percent in advanced economies.

Themed "Stabilizing the World Economy", PolyU's 75th Anniversary Conference is one of the major celebratory events of PolyU's 75th Anniversary, addressing some of the pressing issues which have implications for the stabilization of the world economy, including the recovery of major economies and emerging markets, the impacts of the European debt crisis, the problems and solutions of having an Asian currency, and the role of the world currency system.