New light has been shed on the critical question of whether domestic growth in China, and Asia, can substitute for slowing western growth. It turns out, according to research by the Royal Bank of Scotland, that both have become more export-intensive in recent years, not less:
• China's exports were just 20% of GDP in 2001. But by last year, they were 37% of GDP.
• Asia's export dependency has also increased. Exports accounted for less than 25% of regional GDP in 1980 for Asia (ex-China, Taiwan and Japan). Now they are more than 50%.
The clear conclusion is that Asia's economies did well whilst the West grew, and companies outsourced much of their basic manufacturing activity. China's slowing polymer demand may well be the first sign that slowing western growth is now about to impact Asia as well.