Où vont s’exporter les produits "Made in China" ?
With its US$1.8 trillion of reserves, China could bail out the US without batting an eye. Yet China’s chances of avoiding the US crisis are dwindling by the day. ’US consumers are tapped out and they’re going to stop buying Chinese exports,’ says Simon Grose-Hodge, a strategist at LGT Group in Singapore. ’There’s no way China’s domestic demand can take up that slack.’ Adds Michael Pettis, a finance professor at Peking University in Beijing : ’We should all hope the recession associated with the US financial crisis is very, very mild.’
China’s mercantilist model makes the most populous nation dangerously dependent on consumers in the biggest economy. Growth in Asia will experience quite a setback if the US enters a prolonged period of weakness. While a Japan-like ’lost decade’ isn’t the best-case scenario, Americans aren’t sitting on the kind of savings that Asians are. As US growth slows, debt is reduced and households increase savings, exporters such as Hong Kong, South Korea and Thailand must look elsewhere for demand. Europe and Japan may be of little help. Japan is on the verge of a recession, while Europe is becoming increasingly vulnerable to events in the US. China will be hurt by all of the above, ridding Asia of a key source of stability.
Lourdes conséquences sociales à craindre
Many say China’s slowing from 10 per cent growth to 8 per cent isn’t a disaster. Yet if a government relies on rising prosperity to conceal domestic challenges - including the widening gap between rich and poor - slowing growth is a major problem. Nothing less than a drastic rebalancing will be required : More domestic consumption, a strengthening currency and greater investment in healthcare, pensions and education. Pulling that off quickly and with minimal disruption would be a feat like no other in economic history.
Une croissance en quête d’autonomie
Anyone who believes China is set for smooth-sailing as the US sinks is likely to be as wrong as those arguing a year ago that the sub-prime-loan crisis was containable. One of the key points here is the importance of Asia decoupling itself from the US once and for all. It’s easier said than done. It’s often pointed out that Asia is holding the cards. Were China to dump its US$519 billion of Treasuries, the US would be in for a shock. So would China, as the fallout in the US would drag on China’s all-important export industries.
Many Chinese are recession virgins - they are far more used to booming than slowing growth. Equity investors are far more accustomed to double-digit gains than big drops in shares. It’s an open question how this year’s 58 per cent plunge in Chinese shares affects sentiment.
There is reason to think Asia can stand its ground. The region’s improvements since the 1997 crisis left banks stable, markets humming and currency reserves at comfortable levels. Turmoil in the US is encouraging Asia to take steps to become more independent from bigger economies. Nations such as China are succeeding by ignoring advice from officials in Washington. After years of being lectured to bolster its banks, China is watching as the financial system the US espoused as optimal crumbles.
The reluctance of Asian banks to buy hard-to-value securities such as collateralised debt obligations left them in ’rock solid’ financial shape, says Marc Faber, managing director of Marc Faber Ltd in Hong Kong. Also, central banks have been taking steps to boost investor and consumer confidence. If things get shakier, though, Asia could be dragged down with the US economy.
