EXPORTS from north-east Asia have long been a good gauge of the health of the world economy. The region, which knits together Japan’s high-tech wizardry, Korean and Taiwanese expertise in electronics, and China’s prowess in assembly, produces nearly a quarter of all goods shipped around the world. This juggernaut now appears to be slowing. South Korean exports fell by 8.1% in April from the same month a year earlier, the worst figure in two years. China’s were down by 6.4% year on year. Taiwanese and Japanese exports are limping along as well. The weak figures seem to point to a renewed funk for the world economy. In fact, Asian exports are simply not the reliable barometer of global demand they once were.
First, there is the problem of currency swings. The bad showing for Asia is made worse by the convention of reporting data in dollar terms. America buys only about 15% of Asian exports, but when the dollar is as strong as it has been, the value of exports to other countries appears to shrink. In other currencies, or in volume terms, shipments have been more robust. Frederic Neumann of HSBC, a bank, notes that Europe’s imports from...
from The Economist: Finance and economics http://ift.tt/1K5fsAv
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