Franklin made those observations in his keynote speech delivered to the Commonwealth Economic Forum, held at Grand Formosa Regent Hotel.

The noted economist said this year, China will dominate in various aspects of international affairs such as global economic development, international diplomacy, nuclear disarmament and combating the climate crisis.

He mentioned that China will this year become the world's second biggest economy, replacing Japan.

However, with this, many economists have expressed a fear for a bubbling of China's assets -- a phenomenon reminiscent of what had happened in Japan 20 years ago, he said.

During that time, many believed Japan's economy would surpass that of the United States. But in the end, Japan suffered a long period of stagnation. Similarly, China may experience the same thing as Japan, with many citing China's problem may be "1,000 times more severe" than what happened in Dubai.

Franklin said if Chinese assets were to bubble, such bubbling would be more noticeable in Beijing and Shanghai, where property prices have spiraled out of control. However, he also said with appropriate government intervention, China would not fare as badly as Japan did.

He said there are differences between China and Japan. China has more population and bigger land and thus has a stronger demand for investments in infrastructure and other sectors of the economy.

A second economic trend this year is a struggle between the views of economic optimists and pessimists, a view that is reflected in the name of Franklin's speech, "The World in 2010 -- Half Full or Half Empty?"

Such struggle between the two forces can be viewed as a glass half filled. It may be described as "half full" by the optimists and "half empty" as pessimists.

Against this backdrop, it is hard to say where the economy is going in the long-term, Franklin said, adding an economic recovery to be experienced by many nations this year will be either "L-shaped," "U-shaped" or "V-shaped."

For Europe, its recovery is more L-shaped, characterized by a downturn then a flat movement. The U.S. will experience a "U-shaped," or a slower, recovery. Asia and China, on the other hand, will experience a faster "V-shaped" recovery.

President Ma Ying-jeou was at the forum yesterday morning to give the opening address.

In his speech, Ma envisioned a "global technology corridor" of which Taiwan is a member.

The corridor will involve developed nations, such as the U.S. and Europe, introducing advanced technologies to the vast marketplace of Asia, where they can be marketed and sold. Taiwan, Ma said, can serve as a platform where these technologies can be tested for market acceptance.

Among other speakers in yesterday's forum were Tony Keng Yam Tan, Former Deputy Prime Minister of Singapore; and Zhou Qiren, Dean of Peking University's National School of Development. The forum will conclude today.

(The China Post)