Asian export growth drops for various reasons
Asian export growth drops for various reasons
HONG KONG (AFP): Asian economies are beginning to feel the effects of a drop in export growth, despite estimates which would be the envy of any western finance minister.
The reasons for the export downturn -- or hiccup as some analysts say -- are varied, including rising wages, a production glut, and a corresponding fall in overseas markets, especially in Europe and the United States.
Another problem affecting the balance of payments is the increasing imports into the region as it grows wealthier.
The common denominator, in the cyclical trading world, is business success, which is beginning to present its own problems.
The figures in themselves are, in most cases, still impressive. Thailand, for example, has scaled back its 1996 target for export growth from 18 percent to 14 percent due to a sharp drop in imports by its traditional partners.
Japan, well into its slump but showing signs of getting out, will see exports rise 3.5 percent year-on-year in the 12 months to March 1997, compared with a 5.7 percent increase in the year to March 1996, according to figures from Sakura Institute of Research.
"The present Japanese economy is a bit similar to the US economy in the 1970s when it was shifting from export drives to global developments," says Tokyo Research Institute economist Toshio Sumitani.
"Lower exports due to Japanese companies' overseas production and the economic slowdown abroad can be a restraint for the nation's economic growth, " Sakura Institute said in the report.
The economic slowdown outside Asia is a recurring theme among analysts throughout the region.
All Newly-Industrializing Countries (NICs) in Asia have suffered sharp declines because of a drop in imports by their major partners in Japan, the United States and Europe, according to Thai Deputy Prime Minister Amnuay Virawan.
The regional swings are mirrored by industry swings.
The electronics industry, particularly semiconductors, is in a slump at present, a major factor in many emerging and newly- developed Asian economies.
According to investment house Crosby Securities, Singapore's non-oil domestic export growth will slow to around nine percent in the next two quarters, from around 13 percent, due to the slowing demand for electronics, Singapore's chief export item.
South Korea's year-on-year export slowdown from 33.2 percent to 11.8 percent in the first half of 1996 was also attributed in part to a sharp drop in semiconductors prices.
It's a similar story in Malaysia, where another potential problem is the rising ringgit, which threatens a crunch in labor costs.
Indonesia
The twin effects of lowering demand from international markets and a strengthening currency are also beginning to affect Indonesia.
According to Manmindar Singh, senior economist at the Nomura Research Institute in Singapore, Indonesia's exports began to drop in January but "really slowed" in April and May.
"The rupiah has been very strong, so Indonesia loses compared to other countries that export similar products," he said.
The strengthening dollar may come to the rescue, analysts say.
Taiwan is already feeling the benefit of its own currency's losing ground against the greenback -- its exports advanced 6.4 percent year-on-year in the January-June period, while imports declined 1.0 percent.
Taiwan and the Philippines also bucked the electronics downward trend, with the Philippines enjoying a 47.8 percent year-on-year surge in electronics and components shipments in May.
For the economies emerging from decades of communist market policies, the problems are different.
The drop in Chinese exports has been caused by the poor showing of state-owned companies, the China Daily reported Monday.
A spectacular drop of 25.5 percent of exports from state-owned companies for the first five months of this year, was highlighted by a 38.6 percent rise in exports from foreign-owned and joint- venture firms over the same period.
Neighboring capitalist stronghold Hong Kong's figures are bolstered by re-exports from China.
The value of re-exports rose by 3.8 percent to HK$100.3 billion (US$12.86 billion) in May. The value of domestic exports decreased by 12 percent to HK$17.6 billion.
Vietnam's trade deficit rose 37 percent from a year earlier to US$1.77 billion in the first six months of 1996, according to figures released Monday by the Ministry of Trade.
Exports rose 16.5 percent over the period to $3.05 billion while imports grew 28.9 percent to $4.82 billion, according to the preliminary figures.
Do Quoc Sam, minister of planning and investment, has said he is not too concerned about the trade deficit because many of the imports were productive equipment coming in for foreign joint ventures.
Despite the export falls, the sort of figures Asian nations are throwing out would still be a lifeline to many an embattled western government.
With Japan coming out of its slump, and the US economy improving the signs are good.
There are also signs that with semiconductor demand and prices showing signs of rebounding, the region could benefit.
The Asian party isn't over yet.