Friday, January 01, 2010

Asian Rebound Gathers Strength

South Korea recorded a record fast increase in the value of exports in December, up 33.7%, while imports rose 24%. Meanwhile índustrial production rose 17.8% in November.

Taiwan at the same time saw industrial production rise as much as 31.5% in November.

Hong Kong meanwhile saw retail sales rise by 11.7% in nominal terms and 9.8% in real terms in November.

Of course, the high growth numbers for South Korea, Taiwan and Hong Kong is largely due to a base effect created by the depressing numbers they saw in late 2008, but they nevertheless show that the Asian economies have recovered fully from that slump and they are now in most cases showing even higher levels of output and trade than before the crisis.

Growth in these countries are mostly driven by the boom in China. South Korea for example saw exports to China rise 74.4%, while exports to Europe rose by 49.4% and exports to the U.S. rose just 8.7%. China for its part saw its manufacturing survey index rise to a 20-month high in December.

Recent indicators suggests that growth is increasing in Europe and the U.S. too, but nowhere near as fast as in most Asian countries. As long as it lasts, the Asian boom will help drive commodity prices even higher. The dependence on China is however not entirely a good thing given that its boom is partly unsound (partly driven by excessive money supply growth).