Amigo! They are not so sure anymore. "if economic growth in developed markets were to fall off the cliff, would growth in emerging markets save the world economy? Would the penny-saving populations of Asia at least provide a backstop? In short, is there any hope of a growing market anywhere, for Western corporations which are faced with declining sales and revenues from their home markets?
As you can see they do not state -as they did before- "there is no decoupling!"
Asia: the world’s super hero?
August 29, 2011 3:00 am by Alexandra Stevenson
Here’s a thought: if economic growth in developed markets were to fall off the cliff, would growth in emerging markets save the world economy? Would the penny-saving populations of Asia at least provide a backstop? In short, is there any hope of a growing market anywhere, for Western corporations which are faced with declining sales and revenues from their home markets?
In his most recent note to clients, Can Asia Save the World?, HSBC’s Frederic Neumann illustrates why it’s not all bad news.
Neumann first looks at global GDP and breaks down contribution to global GDP by the US, the eurozone, China and Asia (excluding Japan and China). He points out that each year since 2006 Asia has contributed more to the global economic pie than the US and the EU combined.
Using HSBC’s own growth forecasts and IMF data, Neumann goes on to argue that global growth will continue to be sustained despite a slowdown in the US and Europe.
Neumann then directs his lens to look at consumer spending in US dollars to see if the story changes. As most beyondbrics readers will know, overall household spending in the US is significantly higher than Asian household spending. China, the biggest potential contributor to global spending, can’t get its people to spend fast enough and encouraging domestic consumption remains a major focus for the Chinese government.
But Neumann points out that incrementally, Asians spend more than US households and so global consumer spending would continue to grow even if spending in the US and Europe were to remain at current depressed levels.
Neumann’s forecasts come with plenty of caveats (such as the fact that rising inflation in emerging markets could slow both GDP growth and raise prices thus dampening spending). Furthermore, if spending in the US and Europe remain depressed, this will eventually have a knock-on effect on Asian countries that rely heavily on exports to the US. Eventually, depending on how long much of the western world suffers economically, this will all filter down to the average man in Asia.
But with so much focus on the gloom and doom of global markets at the moment, Neumann’s charts offer a very small bright spot for the short term future. |
