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Asia's Growing Economies Set to Reshape World Trade FlowsFriday, December 10, 2010 > 09:26:11
(International Freighting Weekly – Mike King)
Analysts predict next decade will be dominated by consumer demand in the east
Asia’s emerging economies will reshape world trade over the next decade, according to leading analysts.
But, speaking at a McCloskey coal conference in Indonesia last week, Rajiv Biswas, Asia-Pacific Chief Economist at IHS Global Insight, warned that net exports from Asia’s leading suppliers to the U.S. and Europe “will slow considerably in the coming quarters,” because “impetus from inventories has already peaked”.
He predicted consumer spending by Asia’s expanding middle-classes would change world trade flows over the next decade, sparking “a shift from west to east” that would dramatically “re-engineer economies across Asia” as China sucked in imports from other parts of the continent.
Biswas’s comments echoed the findings of a new report by Macquarie Economics Research, that found Asia’s developing economies were comfortably outperforming historical trading peaks – helped in large part by internal demand. While trade in other developing economies during September was still 2.2% below the peak of April 2008, and trade by developed economies was down 8.8%, flows across Asia were 8.3% higher than all previous peaks.
“In the two years from the pre-crisis level of Q3 2008 to Q3 2010, Asian exports rose 10% while imports climbed 17%,” says the report. “The main beneficiaries of the implied boost to external demand have been Latin America and the Middle East/Africa, which saw export growth comfortably outpace imports.”
Macquarie said the recovery in Asia over the past 18 month was “exceptional”, compared with the rest of the world. It said industrial production data pointed to this recovery being led by local demand.
Biswas said economic growth in Asia would be strong through to 2012 with both China and India expected to grow by more than 8% in 2010-2012. “2010 has been a stellar year for Asia GDP growth, and the strength of China has helped Korea, Taiwan and South-east Asia,” he added.