Sign of the Times: Emerging Asia Surpasses EU as U.S. Export Destination
For the first time in recorded history, the moving 12-month sum of $227.6 billion of U.S. sell exports to Asia?s emerging market countries surpassed the? $223.7 billion of such exports to the European Union.
In the year through March, he notes, U.S. sell exports to emerging Asia — which includes China, India, Hong Kong, Taiwan, Korea plus a handful of smaller nations — rose by 3.7% while shipments to the EU dropped by 13.9%. In other words, U.S. exports to Europe have already been dwindling while Asia has become an increasingly vital destination for U.S. goods. That should help U.S. companies avoid too much of a hit from euro zone woes.
But the development carries risks of its own: Asian economies are on the rise so strongly at the moment that China in particular is scaling up efforts to damp inflation through tighter monetary plot. While a ?soft landing? outcome in which the Chinese economy slows to say at 8% annualized progression rate would be ideal, a harder landing whereby higher interest rates slow demand precipitously can’t be ruled out. To be sure, it?s one of the top risks to the global progression outlook. Though much attention has been focused across the Atlantic lately, it?s really the Pacific Rim which perhaps should merit closer scrutiny.