Describing Asia as "the fastest growing region" in terms of economy, Australia's Reserve Bank Governor I J MacFarlane has said countries which can adapt to the emergence of the Asian tigers India and China, will thrive, while those which go into a defensive mode will stagnate.

"A lot of countries are terrified.....as they see China and India threatening their own industries. Other countries see themselves in a position to benefit from this growth, and Australia surely has to be one of them," MacFarlane said at a speech in Sydney.

"The potential benefit comes from the fact that China and India will not only be large exporters, but will be large importers as well," he said, pointing out that in the past year alone, Chinese imports rose by 40 per cent.

"Over any measure, say, 20 years, 10 years or even five years, Asia is the fastest growing region in the world, despite what we can now see was a relatively brief setback during the Asian crisis. And there is no reason to believe that it will not continue," the governor said.

"In fact, there is reason to believe that it will become more pronounced. Over the past few decades, a number of smallish Asian countries learned how to grow quickly, and now we are seeing the two truly huge countries (China followed by India) achieve the same sort of consistent high growth rates," he said.