Looming Recession In Europe And Slow Recovery In US Will Be Challenge For Asia

Stephen Roach tells us that Asia will have to stimulate consumption internally in order to deal with slow economic growth in the US and the eurozone. The Asian economy has depended upon exports for 44% of its GDP. The US and European markets account for 38% of China's exports. Consumption has slowed down in the US and Europe. The result has been a drop in China's exports from 31% of GDP to 16% between October 2010 and October 2011. China and the rest of Asia will have to bolster internal investment spending along with an increase in consumer spending to compensate for declining exports. This is the only way for Asia to decouple itself from a certain recession in Europe and a long term period of slow growth in the US.