Korea, Democratic People's Republic of
We are finally starting to see some positive news around the East Asia and Pacific region, but it is too soon to begin to speak of "green shoots" of economic activity or reaching the bottom of the economic downturn in Asia. Although the Swine flu (one disease originating from animals that did not come from Asia!) and the nervousness about the condition of U.S. banks had a slightly negative impact on financial markets in Asia this past week, the stock markets are still up by about 12% for the year – led by Indonesia (21.6%), Korea (11.8%), and China (9.4%).
When I think about the biggest frustrations that typically come with living in, or simply visiting, a big city, bad traffic probably tops my list. For me, few things are more maddening than being stuck in a slowly moving (or worse, stand-still) line of cars. This is why it's not too surprising that bicycle-sharing programs have become quite popular here in Washington, D.C., and in several North American and European cities.
Now in Asia, these programs, which provide people with free or affordable access to bikes, are apparently starting to take off in popularity. The Springwise entrepreneurial blog points us to ambitious new bike-sharing organizations in the Taiwanese cities of Taipei and Kaohsiung City, as well as similar programs in Changwon, Korea and Hangzhou, China.
Cities and communities love and often support bike-sharing programs because they help reduce traffic congestion, noise and pollution. And the rentals are usually cheap, giving another option for transportation to more people. I suppose bicycle congestion still has a potential of being an annoyance, but at least they don't smell of exhaust and can't honk at you.
I’m beginning to sound like a broken record, but the bad news keeps coming on the economies in the region. As the Financial Times just put it, “The Asian Financial Crisis Deepens.” Thus far, the deteriorating economic performance has not appeared to flow through to the financial sector, but it now seems t
Unfortunately, we start this roundup as we did the last – with more economic bad news. Exports dropped 2.8 percent and imports declined 21 percent in China on annualized basis in December. Also, China reported the first slowdown in growth of its foreign reserves since 1998, although reserves still rose by $45 billion in the fourth quarter of last year to about $1.95 trillion. Debate is also now swirling about rate of China’s economic growth for 2009, and even the central bank governor now is publicly setting expectations that the target rate of 8 percent may not be achievable.
The December export numbers for China showed a 2.8 percent decline from the year before. This was the worst showing in a decade, but better than the 4-5 percent decline expected by the business press. There is still plenty of cause for worry, as economist and blogger Brad Setser wrote in a recent post, "This really doesn’t look good". While Setser is talking about the breath-taking drop in Korean and Taiwanese exports in December, some of those exports normally would be on their way to China for further processing and re-export. So, the grim news from those economies in December probably presages more tough times ahead for China's exports.
In this deteriorating global environment, the Ministry of Finance and the World Bank's Beijing office last week held a seminar with some very good international and Chinese economists to discuss China’s macroeconomic policy options. While the economists had a wide range of views, I took away a pretty strong consensus from them on three things:
In my last post, I discussed how emerging Asia is getting hit by the financial storm and the early signs of stress in the financial systems across the region. The intensity of this storm appears to be getting worse, but governments across East Asia are taking a wide range of measures to bolster their financial systems.