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Despite a slowdown in China, East Asia remains the fastest growing region in the world, the World Bank said in its East Asia and Pacific Economic Update report, published on Monday April 7.

“A slower-than-expected recovery in advanced economies and a rise in global interest rates and increased volatility in commodity prices, on account of the recent geo-political tensions in Eastern Europe, serve as reminders that East Asia remains vulnerable to adverse global developments,” World Bank chief economist Bert Hofman said in the report.

“To keep growth high, over the longer term, growing East Asia should redouble [its] efforts to pursue structural reforms to increase underlying growth potential and enhance market confidence,” Hofman said.

The World Bank pointed to a number of Chinese structural reforms which are already talking place in finance, market access, labour mobility and fiscal policy in a bid to increase growth efficiency.

China’s fiscal reforms have already begun have an impact on the steel industry.

In March, Shanxi mill Haixin Steel defaulted on a loan, prompting the closure of all its six blast furnaces.

The case of a mill being forced to halt production due to a loan default has been taken as a signal of industry restructuring, with the Chinese government looking to cut back lending to steel companies in a move towards marketisation.

The World Bank warned that while successful reforms could bring Chinese trade partners benefits, any issues surrounding the move towards marketisation could be detrimental to those buying or selling into China.

“Spillovers from a disorderly rebalancing in China could hurt regional and global growth, especially in countries relying on natural resource exports,” Hofman said.

The impact of Haixin Steel’s default has already been felt by iron ore exporters, who saw seaborne prices of the steelmaking raw material drop sharply in the wake of the news. Seaborne 62% fe iron ore prices fell 11% in four days – from $116.44 on March 6 to $103.99 on March 10.

Other Chinese government initiatives, such as tax reform and lowering barriers to private investment, may also spur grpwth in the short term, the World Bank said.