Unstable regional trade growth returns

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KUCHING: After a sound recovery in 2010, exports from Asia and the Pacific are again experiencing risks of deceleration as export growth now is below the pre-crisis level.

According to the Asia Pacific Trade and Investment Report (APTIR) by the Economic and Social Commission for Asia and the Pacific (ESCAP), the export growth of the developing Asia-Pacific region dropped from about 32 per cent in 2010 to 13 per cent in 2011.

However, if China’s exports were excluded, the growth rate was only nine per cent.

The pattern for imports was similar, with growth dropping from 35 per cent to 18 per cent during the same period, and to 14 per cent if China’s imports were excluded.

The report noted that exports by the Asia-Pacific region continued to grow at about four per cent during the first half of 2012, while at the global level exports contracted from a five per cent growth rate to negative one per cent during the same period.

Imports also started to contract towards mid-2012, although growing consumption has kept the region importing at a faster rate on average compared with the rest of the world.

Despite performing well on a whole, some countries in the region had problems keeping up. Several otherwise dynamic trading economies (for example, Malaysia, the Republic of Korea, Thailand and Taiwan Province of China), faced a significant slowdown in their trade, starting in the second half of 2011.

“The supply-chain disruptions due to flooding in Thailand at the end of 2011 affected trade by both the country and the region almost immediately and continued into the first quarter of 2012,” stated the report.

“Thailand’s trade recovered by February 2012 but subsequently continued to fluctuate. Moreover, Australia, Indonesia, the Republic of Korea and Taiwan Province of China have been confronted with weakening demand from China and the rest of the world, which resulted in decreasing growth of their exports from March 2012.”

Meanwhile, India was able to capture benefits from its unique trade pattern and record the fastest export growth from the second half of 2011 until early 2012, when it also went into a serious export growth dive.

India’s situation has been affected by its rather high specialization in exports of IT-related services combined with rather weak integration in the regional production networks.

Consequently, Indian exports have been more resilient to the shocks. However, the country remained vulnerable to the economic uncertainty in the US and the European Union.

With both of these economic powers unable to restart their economic engines, India’s export performance in 2012 was no different from the rest of countries in the region.