Asian economies riding out US woes
Previous troubles in the US economy have caused Asia to skid badly - but analysts think the region has matured enough to get through any bleak days ahead for the United States.
By Agencies |
HONG KONG: Previous troubles in the US economy have caused Asia to skid badly - but analysts think the region has matured enough to get through any bleak days ahead for the United States.
In the past, woes in the world's biggest economy have hit Asian exports, robbing funds for investment and leading to a fullback across the region, said Andy Xie, an economist and former Morgan Stanley analyst in Shanghai.
"A lack of money leads big projects to be postponed, giving rise to a vicious cycle. But this is the first time in history that emerging economies don't have such constraints," Xie told AFP.
Now, he said, Asia has built up huge foreign exchange reserves worth trillions of dollars, providing a buffer to fund those big infrastructure projects and break the cycle.
The reserves, amounting to $1.4 trillion in China alone, have accumulated because of trade surpluses and a stampede of foreign investment.
"China will continue to grow regardless," Xie said. The United States could be facing a sharp slowdown due to the credit crunch and sliding property market resulting from a mortgage default crisis, which along with record oil costs could weigh on its usually spendthrift shoppers.
Those concerns have rattled world stock markets, including in Asia, but many experts feel that the region's fortunes are to some extent now standing on their own.
China, and to a lesser extent India are also helping to drive trade within Asia, analysts say.
"People are starting to see all the regional economies around China and India have growth prospects less and less linked to the US and more dependent on intra-regional trade," said Matt Robinson of Moody's Economy.com.
In the past, woes in the world's biggest economy have hit Asian exports, robbing funds for investment and leading to a fullback across the region, said Andy Xie, an economist and former Morgan Stanley analyst in Shanghai.
"A lack of money leads big projects to be postponed, giving rise to a vicious cycle. But this is the first time in history that emerging economies don't have such constraints," Xie told AFP.
Now, he said, Asia has built up huge foreign exchange reserves worth trillions of dollars, providing a buffer to fund those big infrastructure projects and break the cycle.
The reserves, amounting to $1.4 trillion in China alone, have accumulated because of trade surpluses and a stampede of foreign investment.
"China will continue to grow regardless," Xie said. The United States could be facing a sharp slowdown due to the credit crunch and sliding property market resulting from a mortgage default crisis, which along with record oil costs could weigh on its usually spendthrift shoppers.
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Those concerns have rattled world stock markets, including in Asia, but many experts feel that the region's fortunes are to some extent now standing on their own.
China, and to a lesser extent India are also helping to drive trade within Asia, analysts say.
"People are starting to see all the regional economies around China and India have growth prospects less and less linked to the US and more dependent on intra-regional trade," said Matt Robinson of Moody's Economy.com.
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