Hours after Japan’s announcement, China released figures that its recovery also continues to pick up steam. Industrial production in the world’s second-largest economy rose nearly 7% last month, beating estimates by economists provided by refinitives. Retail sales increased slightly by more than 4% – the fastest pace this year.
“Due to a better control of the virus, most Asian economies are outperforming their Western counterparts,” said Louis Kuiz, head of Asia economics at Oxford Economics.
They expected most of the major European economies to shrink this quarter due to new Kovid-related restrictions. The United States can record a hit for it He said the increase, even if the government there did not shut down businesses, he said.
The challenge now in Asia is how to keep pace with the slow growth among major trading partners.
“The lockdown in Europe and the renewed slowdown in the US … could be a threat to the recovery of Asia’s exports,” said Frederick Newman, co-head of Asian Economic Research and Managing Director at HSBC. He said that Asian economies depend on global trade, and slow demand from the West could reduce the recovery.
“Asia alone cannot lift the global economy out of its recession,” he said.
‘Center of Gravity’ Shifting East
The Chinese government on Monday acknowledged the risk posed by the continued spread of the epidemic elsewhere.
China’s National Bureau of Statistics spokesman Fu Linghui told reporters in Beijing that Europe and the United States had created uncertainties for China’s exports. Nevertheless, he said that the total value of China’s trade has increased this year, leading to a global trend.
“If Asian economies can continue to avoid major new lockdowns, the impact of weakness in Europe and the US will soften the ongoing recovery in Asia, not by reducing it.”
Despite the state of the epidemic, countries in the region are also attempting to strengthen ties with each other, without the help of the rest of the world.
This weekend, China, Japan and more than a dozen other countries in the Asia Pacific region signed the Regional Comprehensive Economic Partnership, a major trade agreement that has been in place for nearly a decade.
HSBC economists wrote in a research paper released on Sunday, “This could rein in a trend that has been going on for decades already: the global center of economic gravity is pushing eastward.”