“It’s Asia that’s lifting the world, rather than the U.S., and that’s never happened before.”
“The economic center of gravity has been shifting for some time, but this recession marks a turning point,” said Neal Soss, chief economist for Credit Suisse in New York. “It’s Asia that’s lifting the world, rather than the U.S., and that’s never happened before.”
Economists have long predicted that China would eventually surpass the U.S. in influence. That change may be arriving sooner than expected.
In short: Decoupling
While economists like Mr. Soss expect that growth to spill over to the United States shortly, the effect is already visible in Europe.
Indeed, after the French and German economies shocked most economists this month by turning in positive performances for the second quarter, the normally conservative Deutsche Bank released a report titled, “Eurozone Q2 GDP: Made in China?”
For now, the answer seems to be yes. “It’s quite amazing, because usually Asia doesn’t play such a big role in European exports or output,” said Gilles Moec, senior European economist with Deutsche Bank in London.
French exports to China and other East Asian economies rose 18.7 percent in the second quarter, according to customs data, a sharp turnaround from the 16.2 percent drop recorded in the previous quarter. Overall exports to the region from the 16 countries that use the euro currency increased 6.3 percent in the second quarter, reversing a 6.2 percent drop in the first quarter, Mr. Moec said.
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