Jaspal Bindra is the author and is Chief Executive Asia for Standard Chartered Bank. "After the turmoil of 2008, the world is yearning for a period of relative calm, trying to avoid a drastic downturn." That remains to be seen but so far so good!
Calculations by Stabdard Chartered's economist Nicholas Kwan show that even if developing Asia's exports to the US,Europe and Japan drop by 30% in 2009, a bigger decline that seen during the 2001-2002 downturn, it would shave off only about 1.5% from the region's combined GDP. China keeps weather eye to ride out this storm as financial system was somewhast insulated from global turmoil with flexibility.
The ever-growing middle class of emerging Asia-a group that has saved prodigiously during the boom times - will need to pick up some of the slack left by the withdrawal of Western consumers. The middle class in Asia,excluding Japan,is comprised of more than 250 million people. This is the segment that is willing to pare downsavings and take on debt to go on overseas holidays, buy homes and cars, eat out at restaurasnts and continue to buy goods.
I have been witnessing such trends in China especially in Shanghai. I sent my past blog entitled "Paradox of Thrift" to be relevant to China in particular. The middle class in the USA is shrinking as per the research report years ago by Brookings Institution but we have faith,hope and charity for those who are suffering from financial crisis in America.
Francis Shieh a.k.a. Xie Shihao,an independent observer of Sino-American economics in action in USA and in China.
February 6,2009 at 3.26 p.m. in Shanghai,China