Asian exports collapse – Japan’s fall 46%

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Japan’s exports fell 46% in January, after a 35% fall in December. Exports to the US fell 53%, and to China fell 45%. This makes it likely that Japan’s economy will shrink further, after the 3.3% decline in 2008. It could soon become the first G-7 economy to fall into depression – defined as a 10% fall in GDP.

Asia’s economy has become heavily export-dependent in recent years. The chart above, from today’s Financial Times, illustrates this by individual country. This dependence will make it very hard for most Asian countries to maintain domestic GDP growth, if their export sales to N America and W Europe are falling rapidly.

The implications for chemical demand are worrying. Asia’s exports of manufactured goods to the West have been the driving force for chemical growth in recent years. Now, the trend is reversing rapidly. Japan’s export fall included a 52% decline in car parts, for example – a key demand sector for many chemical producers.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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