Latest from Dan Steinbock, ICA Institute Research Director of International Business:
Dr Steinbock is a contributor to China Daily, China's leading English-language daily. In his new commentary, "Integration to take over export-led growth" (China Daily, April 15, 2009), he argues that Americans are no longer overconsuming but saving eight times more than only a few years ago. As a result, East Asia's export-led growth model has collapsed. The contraction of exports, as severe as it has been, does not mean the end of exports. "Take for instance the collapse of car sales in America," he argues. "If the current replacement ratio truly prevails, a typical car would have to last some 27 years. Such a ratio is simply not sustainable."
Despite the turmoil of Thailand, China-ASEAN cooperation is now moving to a new phase. Demonstrating leadership, China will establish a $10 billion China-ASEAN investment cooperation fund for infrastructure construction, energy production, information technology and communications. China also plans to offer $15 billion in credit to ASEAN countries during the next three to five years. "The longer-term challenge for Asia's export-heavy economies is to reduce dependence on wealthier consumers in the West," argues Dr Steinbock. "Surmounting legacies of colonialism and historical division, many Asian nations are now developing bilateral and multilateral free trade agreements. Regional integration is one way to achieve that objective and to compensate for decreases in external demand."