East Asian economy shows a downward trend due to the decreasing European demand – Part 2

Thailand, one of the promising economies in the Pacific, was struck brutally by the Monsoon floods during the latter half of 2011. The adversity took its toll on factories and countless equipment. The mechanized industry is getting back on its feet but the lack of exports to Europe still keeps the downward trend unchanged. Same is the case with Philippines, which showed a disappointing deficit in exports and imports.

Surprisingly, the countries that remained unaffected by the European disaster were Indonesia and Malaysia. Both of the conglomerates showed a steady growth in exports, particularly Indonesian, where exports grew 6.5 percent. Malaysian economy was mainly supported by 2010 export performance. However, Kuala Lumpur seems a little worried for this year.

Despite all odds, China remains the main actor in the region. The Chinese economy has to play the lead role in getting the East Asian countries out of these unfortunate times. With a population of 1.3 Billion, the country is not only the biggest consumer market in Asia but also the world. The East Asian countries should be the first to take the opportunity into their stride.

However, this is not possible until the Chinese government steps up to encourage domestic consumption. The country is living through the miseries of its own. While the export demand is at its record low, China—the major exporter in the world—is finding it hard to sustain the balance in exports, gross domestic product and internal consumption.

Although the Chinese government has taken some steps in encouraging domestic purchasing power, it is expected to take effect in years, if not decade. Countries like Japan, Thailand and Singapore are major suppliers of commodities ranging from raw material to home appliances to automobiles but until the Chinese customer does not attain the confidence to purchase these items, there is not good in being the most populated country in the world.

After China, India is the second largest market in the world but it tows the same line. The domestic consumption is limited in the country and most of the products and raw materials are already manufactured in India on large scales.

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Posted by Usman Khalid on Jan 9 2012. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry