Asian economies rely more on China
Big sequential GDP recovery reported in Singapore
By Allen Wan, CBS.MarketWatch.com
Last Update: 8:04 AM ET Nov. 17, 2003
TOKYO (CBS.MW) -- The United States will continue to be Asia's biggest export market for the foreseeable future, but the region's growth prospects will increasingly depend on China, economists say.
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On Monday, Goldman Sachs said it has upgraded its 2004 growth forecasts for Singapore, South Korea, Taiwan and Hong Kong due to a bullish view on China.
"A further acceleration in China in 2004 will likely reinforce the strengthening external demand for Asian exports," the broker told clients in a note.
China is becoming a voracious importer of raw materials, electronics components, oil and other goods as it tries to meet the seemingly insatiable demand of an economy that's been growing at a rate of better than 8 percent.
Goldman raised its growth forecasts for South Korea to 6 percent from 5 percent; Singapore, to 5.8 percent from 4.5 percent; Hong Kong, to 6 percent from 5.4 percent; and Taiwan, to 5.8 percent from 5 percent.
In Singapore, booming electronics exports fueled growth of 17 percent in the third quarter from the previous quarter, the Trade and Industry Ministry said.
The city-state's GDP had declined 9.8 percent in the second quarter. Compared with year-ago levels, Singapore's GDP rose 1.7 percent in the July-through-September period. Read pulse.
Hayes Miller, head of global asset allocation at Baring Asset Management, said that China is sucking up a huge amount of imports from Japan and the rest of Asia, meaning that the strength of the Japan's export-led economy will depend largely on whether present trends continue.
"We like exporters into Asia. Japan is selling significant industrial equipment into Asia, particularly China," he told CBS MarketWatch. Read the interview.
Goldman Sachs' Tetsufumi Yamakawa said in a recent note that he expects China to become Japan's biggest export market in the next year or two, based on present trends.
China, including Hong Kong, now sucks in 18.3 percent of Japanese exports, while the U.S. share has fallen to 24.9 percent, he said.
China's economy grew 9.1 percent in the third quarter and is expected to improve on the 7 percent growth target that the government in Beijing has set.
On Monday, the government said that retail sales rose 10.2 percent in October on a year-over-year basis, marking the biggest gain in two years. Read pulse.
Allen Wan is the Asia bureau chief for CBS MarketWatch, based in Tokyo.
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