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05/24/2001
The Asian Economy
Some statistics gleaned from the pages of AsiaWeek tell the
story of a sliding economy in Asia.
The first set of numbers are for "percentage increase in exports,"
the second is for GDP growth (estimates for 2001 from last
November, as well as this past April).
China
Q1 2000 growth in exports 39.1%
Q1 2001 14.7%
Nov. est. of 2001 GDP growth 7.8%
Apr. est. 7.7%
Hong Kong
Q1 2000 20.0%
Q1 2001 2.3%
Nov. est. 4.3%
Apr. est. 3.8%
India
Q1 2000 11.5%
Q1 2001 14.3%
Nov. est. 6.6%
Apr. est. 6.2%
Indonesia
Q1 2000 39.8%
Q1 2001 5.0%
Nov. est. 4.2%
Apr. est. 3.3%
Japan
Q1 2000 18.0%
Q1 2001 -5.3%
Nov. est. 2.0%
Apr. est. 0.9%
Malaysia
Q1 2000 22.3%
Q1 2001 2.0%
Nov. est. 6.6%
Apr. est. 4.6%
Philippines
Q1 2000 9.6%
Q1 2001 -0.5%
Nov. est. 2.7%
Apr. est. 2.8%
Singapore
Q1 2000 23.0%
Q1 2001 7.3%
Nov. est. 6.5%
Apr. est. 4.8%
South Korea
Q1 2000 30.0%
Q1 2001 3.1%
Nov. est. 5.7%
Apr. est. 3.9%
Taiwan
Q1 2000 18.4%
Q1 2001 -5.0%
Nov. est. 5.5%
Apr. est. 4.5%
Thailand
Q1 2000 27.5%
Q1 2001 -1.3%
Nov. est. 4.3%
Apr. est. 3.2%
As you can see, with few exceptions, growth in exports is
decelerating in rapid fashion, thanks in large part to the
slowdown in the U.S.. And the GDP figures, while they still
look decent on the surface, really paint a different picture.
Remember, these are the same economies, with the possible
exception of China, which went through a horrible period during
the Asian Crisis (1997-98). Growth of 3-4%, from the low base
of a few years ago, doesn''t begin to repair the damage.
Economies like South Korea and Indonesia need to grow at 6% +
rates just to begin to make up for the pain that was felt back then.
And then you have political situations, like in Taiwan, where
unemployment is at a 16-year high. [It''s just 4% but this is in a
land where everyone could find work in the tech sector and now
employment opportunities are shrinking up.] Many on the island
are beginning to question whether the nation can even afford the
weapons that Washington has offered them.
On the technology side, one look at electronics exports also
paints a bleak picture unless capital spending picks up,
worldwide, something which doesn''t seem likely to any
significant degree in the near term.
Electronics Exports as a % of Total Exports
Singapore 64%
Philippines 61%
Malaysia 58%
Taiwan 46%
Korea 38%
Thailand 36%
Hong Kong 33%
China 24%
But wait, there''s more. Assuming the current slump in
technology doesn''t last forever, consider the problems facing the
developing countries of Asia as they attempt to deal with the I.T.
employment crisis. For example:
--China has 100 jobs for every computer-science grad.
--Japan is seeking 200,000 I.T. professionals
--Singapore''s universities can fill only 25% of 10,000 new I.T.
jobs every year.
--India believes it may have 2,000,000 positions unfulfilled by
2006.
--South Korea says 210,000 positions will go unstaffed by 2005.
Here''s the point, while Web designers and content editors may
be out begging for work, "When it comes to programmers,
systems analysts, database administrators and project managers -
the knowledge workers companies need to produce new and
better products at cheaper prices using more efficient
technologies - there is definitely a crisis in Asia," writes Cesar
Bacani in AsiaWeek.
Bacani adds, "An economy with too few knowledge workers
cannot hope to compete in a rapidly globalizing world where a
consumer in Boston can search for the cheapest notebook
computer through the Internet - and buy it even if the seller is
somewhere in China."
I don''t necessarily agree with the above, since I''m not as
sanguine on the future of e-commerce as others like Bacani may
be, but his position is the commonly accepted one at the moment.
Developing countries like China, India, and the Philippines are
watching their best and brightest being wooed away by Japan
and the West (nations which can pay far more and have a better
quality of life).
Of course there are occasional bubble bursts, such as that which
is occurring in India at the moment. But, if you assume these are
just transitory events in a long-term uptrend in all things tech,
unless Asia can hold on to its own talent, the going could be
tough. And without strong economies in this region, civil unrest
becomes the norm.
On an entirely different topic, having to do with food, following
are the # of McDonald''s restaurants per 1 million people in
various Asian countries.
Singapore - 30.3 / 1 for every 33,000 inhabitants
Japan - 28.4
Hong Kong - 26.1
Taiwan - 15.2
China - 0.3
India - 0.03 / 27 outlets: 1 for every 37 million.
McDonald''s is obviously being extra cautious with the Indian
market, selling only mutton and chicken burgers. But then they
still find themselves in hot water with the revelation that they use
beef fat in the making of their fries.
The fast food business in general has really tailed off in Japan,
growing only 0.8% per year for the period 1995-99. Part of this
is attributable to Japan''s stagnant population growth, I imagine.
On the other hand, fast food is growing rapidly in India and
China, 10.4% and 8.9% annualized, respectively.
And how about rice? 90% of the world''s rice production and
consumption is accounted for by Asia. The average Asian eats
86 kg. per year. Compare that to 9 kg. in America and just 4 kg.
in Europe.
Half of every rice harvest never leaves the farm - feeding the
family that planted it.
Per capita consumption of rice
Vietnam - 212 kg.
Indonesia - 169
China - 107
India - 82
Japan - 75
Now you can see why the politics of rice (particularly in nations
like Japan) is such a vital issue when it comes to trade policies.
Brian Trumbore
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