THE ASCENT OF ASIA
John Llewellyn
Forbes, March 8, 2010
This is the first in a series of edited excerpts from Nomura's recent report, "The Ascent of Asia."
Asia has massive supply-side potential.
It's starting to exploit it. However, fully realizing that potential over the medium term will depend on achieving a sustainable pace and, more important, a sustainable structure, of demand.
Asia's policy makers would be wise to assume that, once the world economy recovers, they will not be able to count on strong export-driven growth. The U.S. and Europe have seen their imports from China increase seven-fold from 1998 to 2007. This has started to provoke protectionist sentiment: Western opposition to penetration of its markets by Asia is growing. Asia should instead plan on taking part in a global rebalancing of demand, whereby domestic demand grows faster in Asia, and slower in the West, than has been the case in recent decades.
Rebalancing is easier for continental-sized economies, which have large actual or potential domestic markets, offering economies of scale in production. The U.S. in the 19th and early 20th centuries, in the West, and India since its independence in 1947, in the East, are two pertinent examples of domestic-demand-led economic growth.
Forbes, March 8, 2010
This is the first in a series of edited excerpts from Nomura's recent report, "The Ascent of Asia."
Asia has massive supply-side potential.
It's starting to exploit it. However, fully realizing that potential over the medium term will depend on achieving a sustainable pace and, more important, a sustainable structure, of demand.
Asia's policy makers would be wise to assume that, once the world economy recovers, they will not be able to count on strong export-driven growth. The U.S. and Europe have seen their imports from China increase seven-fold from 1998 to 2007. This has started to provoke protectionist sentiment: Western opposition to penetration of its markets by Asia is growing. Asia should instead plan on taking part in a global rebalancing of demand, whereby domestic demand grows faster in Asia, and slower in the West, than has been the case in recent decades.
Rebalancing is easier for continental-sized economies, which have large actual or potential domestic markets, offering economies of scale in production. The U.S. in the 19th and early 20th centuries, in the West, and India since its independence in 1947, in the East, are two pertinent examples of domestic-demand-led economic growth.
Viewed against this backdrop, China is an interesting anomaly. Given its continental dimension, China might have been expected to have experienced a domestic-led economic development broadly similar to that of the U.S. and India. Instead, it adopted the small-economy model of export-led growth. However, to the extent that China needs to accelerate the growth of domestic demand, it should indeed be able to pull itself up itself up by its own bootstraps.
(...) [artículo aquí]
Posts
No comments:
Post a Comment