First published: Nikkei Asian Review
It has become almost an annual ritual for the International Monetary Fund to lower its projections for economic growth in emerging countries, including those in Asia, still the most dynamic part of the emerging universe. A key factor in recent downgrades to IMF forecasts has been a fall-off in productivity growth, which is closely correlated with export growth. For most Asian countries, the exports on which they have long depended appear to have gone missing.
In the 25 years to the financial crisis of 2007-2008, world trade grew by just over double the rate of world output. For emerging economies, especially in Asia, this led to a big rise in the share of exports in gross domestic product. For emerging countries overall, the share rose from 20% to 40%. Many Asian economies also boosted their trade with China, which grew from a small proportion to between 10% and 12% of exports for Indonesia and Malaysia, and to between 18% and 25% for Japan, South Korea and Taiwan. In recent years, however, world trade has grown in line with or less quickly than the growth of global GDP. The Chinese market has gone off the boil, to put it mildly. Export growth for Asia excluding Japan has ground to a halt….Read more: