INTRA-ASIAN TRADE

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FIDELITY: ASIA FOCUSING ON INTRA-REGION TRADE

Financial Standard, May 15, 2012

Despite growing fears about a decline in manufacturing, Asia is underpinned by resilient domestic demand and strong growth in intra-region trade, according to Fidelity.

Asian economies are less dependent on OECD countries than in the past, said David Urquhart, portfolio manager of the fidelity Asia fund.

“Today, Asia contributes more to world GDP growth than the US and the EU does combined,” he said.

While there has been concern that consumption rates in Asian economies have not caught up enough to meet a decline in manufacturing, Urquhart said that the region has entered into a sweet spot for strong growth and consumption.

“On the economic side, when countries are poor, their savings rates are high. however once GDP per capita rises into the range between us$3,000 to us$10,000, savings rates decline and consumption becomes a larger portion of GDP,” said Urquhart.

“In the past decade, for example, we saw china’s GDP grow from US$1,000 to US$4,000, or expand four times over.

“Over the same period, we saw car sales in china grow from one million a year to 17 million vehicles a year, or by 17 times.”

An ailing us economy and the dismal state of the EU have forced Asian markets to focus more on intra-region trade.

(…) [art?culo aqu?]

WEAKNESSES IN CHINA?S TRADE

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SLOWDOWN IN CHINA?S TRADE ?POINTS TO REAL WEAKNESS?

Weaker exports than expected and stalling headline import growth signal that government spending is the crucial factor keeping the economy moving

Allen Wang and Nick Edwards (Reuters)

Business Day, May 11, 2012

China risks a fresh downturn in demand for goods from its huge factory sector, with weaker exports than expected and stalling headline import growth signalling that government spending is the crucial factor keeping the economy moving.

Annual growth in imports last month was just 0,3%, far below forecasts of an 11% increase, while exports managed growth of just 4,9% versus expectations of 8,5%, customs data released yesterday showed.

“We know the external climate is not particularly conducive to strong export growth and digging into the data you can see primarily it is a euro-zone story, which is to be expected,” Alistair Thornton, China economist at IHS Global Insight in Beijing, said yesterday.

“But the headline number on import growth is less expected and more worrying. It does point to a real weakness in the domestic economy and shows that we have not yet turned the corner into a sustained recovery.”

The risks to China?s factory-focused economy of weakness in private sector final demand were underscored by a drop-off in shipments from Asian economies that feed China?s export-oriented assembly lines, while robust imports from Australia and solid annual volume growth in raw material imports indicate that state-led infrastructure spending underpins economic activity.

(…) [art?culo aqu?]

Report on Ousted China Official Shows Effort at Damage Control

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Communist Party leaders sacked Bo Xilai, the powerful party chief of metropolitan Chongqing, after being told that he had schemed to remove his police chief and impede a corruption investigation involving his family, according to a preliminary report on Mr. Bo?s actions circulated among government officials.