Global Logistics: Asia Pacific’s challenges and opportunities in market integration

By Patrick Burnson · September 1, 2012

Real GDP in China grew only 7.6 percent year-on-year in the second quarter of 2012, its slowest pace in three years, observes IHS Global Insight Economist Sara Johnson. While the current slowdown in China is not nearly as severe as it was in 2008 and 2009, she says that in many ways China is more “vulnerable” now.

“Credit markets are overstretched, house prices are still unsustainably high, commercial banks are weak, and local government debt is high,” says Johnson. “All this suggests that growth this year and next will only be in the 7.5 percent to 8 percent range. On the other hand, given the recent aggressive policy response by the central bank and government, the odds of a hard landing are no more than 25 percent.”

Japan’s economy, meanwhile, bounced back after its crippling earthquake and tsunami, and a period of contraction. Rebuilt supply chains and investment added to the growth. However a strong yen continued to have a negative impact on exports and led to an increasing migration of manufacturing to its neighbors.

Ti analysts say that Indonesia is expected to be one of the strongest economies in the region, with retail sales growing at 25 percent a year. Malaysia and Thailand are expected to recover from supply chain disruptions, although will be hit hard by weak export markets in Europe. “With Western markets stagnating,” observes Manners-Bell, many economies in the region are looking to intra-regional trade for stronger growth prospects.”

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About the Author

Patrick Burnson
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

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