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From Sagar Chakraverty, Opalesque Asia:
The opponents of the decoupling theory argue that developing countries, led by China, still rely heavily on demand from developed countries for their exports. But the proponents say that because of the strong GDP growth of developing countries such as China, their markets managed to retain growth even during the US recession. It cannot be denied that for many Asian economies and commodity exporters, China is already as important as the US.
Decoupling theory still true?
"Recent data would suggest that Asia has begun to delink from the West in the sense of generating more internal demand for its own products," said ANZ Bank economists Paul Gruenwald and Wei Liang Chang, according to a Reuters report last week. They explained that the rise in the East Asian exports has been propelled due to intra-regional demand (largely Chinese consumptions) rather than inter-regional demand, such as from the western markets.
In the first quarter of 2010, China's imports from Japan jumped 56% y-o-y; from South Korea, 61%; from Australia, 64%; from Taiwan, 95%; from Indonesia, 105%. The red nation is the most coveted destination for commodities exports for Australia, Brazil, Japan, and South Africa in 2009.
China will drive up commodity prices despite a slowdown
“The commodity story will continue in China as the country now swit...................... To view our full article Click here
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