Asia’s export growth has stalled since a post-financial crisis recovery, faced with a combination of weak global demand and structural changes, HSBC said. “Asia’s trade engine has lost its spark,” HSBC said in a note Tuesday, noting that the region’s shipment growth has slowed from an average of 20 percent over 2004-2007 to just 9.6 percent from 2011-2013.
While the bank expects some of the slowdown to reverse, especially as U.S. demand appears to be stabilizing, “the bad news is that developed market demand, while on the mend, is unlikely to deliver the same boost to Asian exports as it did in the past,” HSBC said, adding that developed market demand is likely to remain structurally lower.
Both the Euro zone and Japan are grappling with high government debt and aging demographics, while in the U.S., growth was previously propped up by unsustainable household credit, it noted. But it’s not just developed markets weighing on emerging Asia exports, HSBC said, noting that the U.S., Europe and Japan together account for only 32 percent of the region’s exports, with much of the past’s shipment growth coming from other emerging markets, most especially China.
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