Leads the Global Recovery
In contrast, the
Asia ex-Japan economies as a whole have recovered
strongly and recouped all the GDP lost over the recession.
Despite exports falling by a record 25% year-on-year
in the first half of 2009, these economies managed
to register positive, albeit moderate, growth of 3%.
Domestic demand has remained firm, given the relatively
strong balance sheets of households and businesses,
as well as the rapid implementation of expansionary
fiscal and monetary policies.
The export rebound
in Asia ex-Japan was initially supported by strong
intra regional demand but was later boosted by the
incipient recovery in the G3. The cross-border production
networks in the region, especially in electronics
manufacturing, meant that intermediate inputs are
shipped to multiple destinations before the final
product is exported to end markets. Thus, in the same
way that the decline in final demand had a multiplier
effect on intra-industry regional exports, so have
exports rebounded with the improvement in consumer
and business confidence and the upturn in end demand.