Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The End of the World History Stock Market Chart : Big Pattern = Big Move - 26th Jan 21
Stock Market Recent Sector Triggers Suggest Stocks May Enter Rally Phase - 26th Jan 21
3 Top-Performing Tech Stocks for 2021 - 26th Jan 21
5 Tips to Manage Your Debt - 26th Jan 21
Stock Market Intermediate Trend Intact - 25th Jan 21
Precious Metals Could Decline Before their Next Attempt to Rally - 25th Jan 21
Great Ways of Choosing Good CMMS Software for a Business - 25th Jan 21
The Dark Forces behind American Insurrectionists - 25th Jan 21
Economic Stimulus Doesn’t Always Stimulate – Pushing On A String - 25th Jan 21
Can Karcher K7 Pressure Washer Clean a Weed Infested Driveway? Extreme Power Test - 25th Jan 21
Lockdown Sea Shanty Craze - "Drunken Sailor" on the Pirate Falls Crazy Boat Ride - 25th Jan 21
Intel Empire Fights Back with Rocket and Alder Lake! - 24th Jan 21
4 Reasons for Coronavirus 2021 Hope - 24th Jan 21
Apple M1 Chip Another Nail in Intel's Coffin - Top AI Tech Stocks 2021 - 24th Jan 21
Stock Market: Why You Should Prepare for a Jump in Volatility - 24th Jan 21
What’s next for Bitcoin Price – $56k or $16k? - 24th Jan 21
How Does Credit Repair Work? - 24th Jan 21
Silver Price 2021 Roadmap - 22nd Jan 21
Why Biden Wants to Win the Fight for $15 Federal Minimum Wage - 22nd Jan 21
Here’s Why Gold Recently Moved Up - 22nd Jan 21
US Dollar Decline creates New Sector Opportunities to Trade - 22nd Jan 21
Sandisk Extreme Micro SDXC Memory Card Read Write Speed Test Actual vs Sales Pitch - 22nd Jan 21
NHS Recommends Oximeter Oxygen Sensor Monitors for Everyone 10 Months Late! - 22nd Jan 21
DoorDash Has All the Makings of the “Next Amazon” - 22nd Jan 21
How to Survive a Silver-Gold Sucker Punch - 22nd Jan 21
2021: The Year of the Gripping Hand - 22nd Jan 21
Technology Minerals appoints ex-BP Petrochemicals CEO as Advisor - 22nd Jan 21
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Is Asia’s Economic Rebound Sustainable?

Economics / Asian Economies Sep 02, 2010 - 10:05 AM GMT

By: Investment_U

Economics

Best Financial Markets Analysis ArticleTony Daltorio writes: The United States is fretting about the possibility of a double-dip recession. Europe is looking for signs of the next sovereign debt default crisis. And Asia…

Well, Asia has no such worries. This year, economies from the Indian subcontinent to Australia – though not Japan – will expand by 8.6%, their fastest pace in 20 years!


Nations like Indonesia and South Korea are even in better shape than before the financial crisis hit. India’s economy, growing at more than an 8% rate, has barely paused for breath and China keeps moving at a 9-10% pace.

Naoyuki Shinohara of the International Monetary Fund said in a recent speech: “For the first time, Asia’s contribution to a global recovery is outstripping that of other regions. Rather than being dependent on a narrow export-driven recovery, domestic demand – particularly household consumption – is reinforcing Asian growth.”

Investors can experience some growth as well if they just pay attention to the rising trend.

1997-98 Asian Crisis

Asia went into the recent financial crisis in solid shape. After its own 1997-98 drubbing, most economies there built up big current account surpluses.

By the time the credit markets froze in 2008, those countries accounted for over 60% of global foreign exchange reserves. China alone had more than $2 trillion.

Asia also cleansed its weak banking system and regulated prudently. By rejecting so-called sophisticated financial practices – and despite U.S. criticism for that decision – Asia saved itself a lot of grief.

It therefore had the financial firepower and structural soundness to put towards effective stimulus measures after the west fell. And the various governments could influence their banks and funnel credit into their economies more easily.

Additionally, Frederic Neumann of HSBC points out that Asia can afford to borrow even as western economies struggle to pay off their debts. After a decade of austerity, “Asians are now in a position to buy decoupling [from the U.S. and Europe] on credit,” replacing any shortfall in western demand with domestic expansion.

Inter-Asian Trade

Asia can also rely on exports, which have risen outside of the U.S., Europe and Japan.

According to Daiwa Securities, exports to those countries from the top 10 Asian countries – excluding Japan – fell from 45.5% of its 1997 total to 36.4% in 2009. But the developing world picked up the slack, including the oil exporters of the Middle East.

My colleague, Louis Basenese, recently highlighted South Korea – a big producer of electronic goods, machine tools and cars – as a great example of such growth.

More than 40% of the nation’s exports go to Brazil, Russia, India and China. And that gives South Korea a decent shield against any renewed downturn in the west.

Asian Consumers and China

Finally, Asia is quite simply enjoying a structural pickup in consumer demand.

Car sales in China alone are seven times what they were a decade ago. And in that time, sales of mobile phones in India have risen 250-fold to about 450 million.

Over the past year, imports across nearly the entire region have outstripped exports. Asia’s rapidly growing middle class is absorbing a greater proportion of Asian production.

Much of that stems from China, the region’s sturdiest engine of growth. It continues to push its fellow Asian economies higher with it, along with a number of commodity producing countries like Brazil.

Taiwan, South Korea and Japan have begun to heavily rely on China’s demand for industrial goods, heavy equipment and consumer goods. Meanwhile, Indonesia, India and Australia continue to feed China raw materials.

Overall, Asia still relies on western economies to some degree, but it has become much more self-sufficient in recent years. The future looks bright, thanks in large part to its swelling middle class, according to Peter Elston of Aberdeen Asset Management Asia:

“Of course, Asia continues to be impacted by western demand. But it is increasingly playing less of a role. It’s a fairly simple story, really. Most of Asia is still on a GDP per capita of less than $4,000. That means there is incredible capacity for this region to grow.”

Asian Investments

Investors can make that bright future their own through ETFs such as iShares MSCI South Korea (NYSE: EWY) and iShares MSCI Indonesia Investable Market Index Fund (NYSE: EIDO).

Or, to focus on specific sectors, they can consider two funds from EGShares: China Infrastructure Fund (NYSE: CHXX) and India Infrastructure Fund (NYSE: INXX). In addition, consider China sector funds from Global X Funds, especially Global X China Consumer (NYSE: CHIQ).

Source: http://www.investmentu.com/2010/September/asia-economic-rebound.html

Tony Daltorio

http://www.investmentu.com

Copyright © 1999 - 2008 by The Oxford Club, L.L.C All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Investment U, Attn: Member Services , 105 West Monument Street, Baltimore, MD 21201 Email: CustomerService@InvestmentU.com

Disclaimer: Investment U Disclaimer: Nothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Investment U Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules