Depreciation Of The Euro Is A Drag On Asian Manufacturing

Song Hong, director of the International Trade Research Institute of the Institute of world economics and politics, Chinese Academy of Social Sciences, believes that

The market reaction of the "empty euro" was a ripple. The Asian exchange market situation in December 19th showed that the euro was against the US dollar.

The Japanese central bank's recent survey of the current economic situation shows that Japan's manufacturing industry is affected by the weakening of the euro exchange rate, the export of enterprises is reduced, and the confidence of enterprises has declined.

The Reuters survey shows that the euro zone 2012 will be a year of economic stagnation, and the impact of Asian manufacturing and its exports will also gradually appear.

Asian exports to Europe suffer cold spell

Since the beginning of this year, Asian exports to Europe have been in bad shape.

Between January and September this year, South Korea's exports to the 27 countries of the European Union decreased by 9%, while China's exports to the 27 countries in the same period increased by 6%, but the increase was much lower than that of China's overall exports.

In an interview with our reporter, Professor Xing Yuqing of the Asian Development Bank Research Institute said that the euro exchange rate continued to decline against the US dollar, which would have a great impact on the export oriented economy in Asia.

The 4 ASEAN member countries, namely Indonesia, Malaysia, Philippines and Thailand, are in the lower reaches of the Japanese and Korean multinational production lines. The export of Japan and Korea will also be affected by the 4 countries' exports to Europe.

In 2012, East Asia's export prospects for Europe will be even more bleak.

The Japanese Central Bank released the 15 day enterprise short-term economic observation survey on December. The results show that Japan's large manufacturing enterprises have an index of -4.

Among them, the electronic machinery, oil and coal industry boom index fell, the automotive industry is rising, auto manufacturers are still replenish the sharp drop in inventories after the earthquake, and the outlook index remains at a high level of 21.

For the pessimistic survey of the attitude of large manufacturing enterprises, the Japanese economist, Lu Hao, a chief economist at the Japan Institute of basic research, said that the Japanese economy was stagnant after the summer peak.

Japanese media analysts believe that the European debt crisis needs to rest for some time, and the US economy seems to continue to linger in the low position. The export volume of Japanese enterprises has declined, and the profit margins are facing even more severe challenges.

Li Guangyao, a doctor of public policy at National University of Singapore, told reporters that Singapore's exports to Europe account for a high proportion of Singapore's total exports. The depreciation of the euro will have a big negative impact on Singapore's manufacturing exports.

On the other hand, in a few manufacturing sectors such as electronics, Singapore needs to import some high-tech key components from Europe.

The depreciation of the euro will reduce the cost of importing these components in Singapore, which, to a certain extent, can make up for the decline in exports of finished products caused by the depreciation of the euro, but this factor can not be overstated.

Emerging markets need to open up trade space

Some analysts believe that Europe is at a critical juncture and Europe's demand for Asian exports will continue to decline.

The smaller trade centers, such as Korea, Hongkong, China and Taiwan, which are Europe's main customers, will be affected first.

Mainland China, Japan and India have a larger internal market, which can cushion the negative impact of the sharp drop in foreign demand, but will still be impacted.

British media reported that if European leaders continue to delay the formation of the crisis solution, manufacturers will be more cautious and investment and employment will decrease as the development of the export industry slows down.

The longer the crisis lasts, the more serious it will affect Asia.

According to the experts interviewed, the Asian countries need to make some long-term adjustments to strengthen trade links in the region, as the decline of the European and American economies can not be changed in the short term, such as strengthening trade links between ASEAN members, China and Northeast Asia, in order to better stabilize the Asian economy.

Xing Yuqing said that boosting domestic demand should be the direction of long-term efforts of Asian countries. Besides, Asian countries should also strive to develop new markets such as India and Russia.

The eighth Ministerial Conference of the World Trade Organization formally approved Russia's accession to the WTO on the 16 day. This is a new market and new opportunity for Asian countries.

Gu Qingyang also believes that in the past, the United States overdeveloped the service industry and ignored the power of the long-term development of the national economy - manufacturing industry. In the future, the United States will probably carry out the second industrial revolution, adjust the relationship between the service industry and the manufacturing industry, and increase investment in industry and manufacturing, so as to solve the structural imbalance problem of the long-term weakening of the US economy.

The development of manufacturing industry with high added value will be a breakthrough for the development of manufacturing in the United States.

The recovery of the US economy may be faster than Europe's.

In view of this, Southeast Asia can expand the scope of exports, export semi-finished products and intermediate products to the United States, and participate in the development of the high-end manufacturing industry in the United States.

Song Hong also said that in recent years, China's export growth to the emerging market countries has accelerated. This rapid growth has made up for the downturn of exports to the European and American countries to a certain extent.

In the future, turning to emerging market countries and regions and upgrading of export products should be the direction of China's export trade.