An astonishing rebound
SUMMARY
An astonishing rebound is an article from The Economist print edition, August 13/2009. It’s about the bounciness of Asia’s emerging economies. After having some economic problems in 1997, 1998 and in 2001, this year some people argued that the economy that is based in exporting products could not revive until costumers from rich countries did. The economy in the rest of the world is very weak, even if America recovers itself in the second part of this year, consumer spending looks very bad. But despite what is happening all around the world, Asian economies, increasing western shopping habits, are growing fast.
The four emerging Asian economies, China, Indonesia, South Korea and Singapore are growing by an average rate of 10%, even richer and slower Japan cannot match that figure, it seems to be having a good time too because its recovering faster than its western partners. Asia should grow 5% this year, but the politicians that govern the western part should pay attention to the East, drifting them economic power.
Many people ask themselves, how has Asia made such an astonishing rebound? Well some sceptics claim that Chinas bounceback is a fake because “the components of GDP do not add up, and the data are always published suspiciously early.” (Economist, 2009) But other indicators confirm that China’s economy is coming back. Industrial production increase 11% in the year; electricity output, is growing again; and car sales are 70% higher than the last year. And the whole of Asia cannot be involved in a statistic fraud because South Korea’s GDP grew 10% in the second quarter. Taiwan’s probably increased by even more: its industrial output jumped by an astonishing rate of 89%. India was hitless hard by the global recession than many of its neighbors because it exports less, but its industrial production has also increase 14%.
The article also says that Asia’s rebound has several causes; the first one is manufacturing accounts for a big part of several local economies, and industries such as cars and electronics, the second cause is the region’s decline in exports in late 2008 was exacerbated by the freezing up of global trade finance, which is now flowing again. And finally the third cause is domestic spending has bounced back because the fiscal stimulus in the region was bigger and worked faster than in the West. But not all of the Asian market is good news; Asian policymakers now face two difficult problems. Their immediate dilemma is how to sustain recovery without inflating credit and asset-price and policymakers’ reluctance to let their currencies rise faster against the dollar means that their monetary policy is, in effect, being set by America’s Federal Reserve, and is therefore too lax for these perkier economies.
(click the Earth photo and you’ll be able to see the entire article in The Economist web site)
ANALYSIS
Is no surprise that Asia has made such an incredible rebound, because that continent has always been self-sufficient, they produce their own things and the industry that Asia has is one of the biggest of the world since many years ago. They also has internal markets that helps them survive and the prices that Asia gives to their products are the best prices, prices that are accessible for everyone that is or isn’t in an economic crisis. As the article says, Asia’s prudence during the past decade did not allow it to escape the global recession, but it made the region’s fiscal and monetary weapons more effective. Asia is one of the continents in the world with a production rate so high that it’s difficult not to see that continent back on its feet in such a short period. The discipline, the persistence and the responsibility of the Asian workers is like no other and that’s what makes Asia a continent with a full recovery, because they can survive with no help at all, producing clothe, cars, toys and technology. All of these are great products with the best prices in the market so they are products that are useful to every kind of people. Asia is a continent that we have to admire. They take advantage of each and every resource that exists in their continent. If they can’t find or buy what they want, they are going to make that product with the resources they have in their countries and they are going to sell that in the best price so it can compete and make a lot of profit. And with this kind of production rate is so difficult not to have an astonishing rebound. MARÍA ANGELICA MEDINA AND MARÍA JOSÉ STOZITZKYHolaHola