Saturday, May 9, 2009


Will the contribution of the Asian upturn to global growth be sufficient?

In all likelihood, there is a lasting upturn in growth under way in China, driven by government expenditure and credit, and that also concerns private demand: it is also likely that this recovery will extend to the rest of Asia, given the trade links, but probably to a lesser degree to Japan, because of the yen’s appreciation against other Asian currencies.

On the other hand, it is unlikely that there will be a significant pick-up in domestic demand in the United States, Europe, and Japan, due to the continued deleveraging, the high level of funding costs, and offshoring.

The question therefore arises whether the Asian (Chinese) recovery is sufficient to jump-start the global economy. We show that China and other Asian emerging countries have a substantial weight, since their contribution to the growth in global trade in a normal period is the same as that of the United States + European Union + Japan taken as a whole.

To see full report: SPECIAL REPORT