SYDNEY: Asia's economies signalled they are best placed to weather Europe's debt crisis this week, as results released yesterday - from China's exports to job growth in South Korea and Australia - surpassed analysts' forecasts.
China's exports jumped the most in six years and property prices rose at a near-record pace, signs that the economy is withstanding the debt crisis in Europe and remains at risk of overheating.
Unemployment rates in South Korea and Australia fell last month, and Japan said its economy expanded more than previously estimated in the first quarter.
The resilience may amplify American calls for Asian nations to reduce their reliance on exports and increase their contribution to a world recovery clouded by Europe's fiscal woes.
China has so far resisted letting its yuan rise against the United States dollar, seeking to shield its exporters, while Japan's central bank has flagged the recovery in refraining from stepping up injections of cash.
'These numbers are very positive,' said Mr Brian Jackson, a Hong Kong-based strategist at Royal Bank of Canada. 'Asian countries have pretty strong fiscal positions and they've got growing domestic demand which will help insulate against any shocks out of Europe.'
Also, the 'sharp pick-up in China's trade surplus will not go unnoticed in Washington, where there will be more pressure on the US administration out of Congress to take a tougher line with China' on its currency, he said.
Regional stocks surged yesterday after Chinese shipments abroad climbed 48.5 per cent last month from the figure a year earlier. China's property prices also rose at the second-fastest pace on record last month, jumping 12.4 per cent from the figure a year earlier, a sign that the government crackdown on speculation has yet to avert the threat of an asset price bubble.
Japan's economy expanded at an annualised 5 per cent rate in the three months ended March 31, quicker than the 4.9 per cent rate reported last month, driven by exports and an upward revision to consumer spending.
Australia said yesterday its employers added 26,900 workers last month, more than the 20,000 forecast by analysts, pushing down the jobless rate to 5.2 per cent from 5.4 per cent - almost half the level in the US and Europe. Payrolls rose for the third straight month, underscoring the central bank's assessment that economic growth will accelerate this year as a mining investment boom stokes hiring.
Meanwhile, South Korea's unemployment rate declined last month to the lowest level since October 2008, as the strengthening economy prompted companies to hire.
The jobless rate fell to 3.2 per cent from 3.7 per cent in April, after reaching a 10-year high of 4.8 per cent in January, Statistics Korea said yesterday.
Asia's growth contrasts with several European nations that may see their gross domestic product shrink, with the risk of a double-dip recession, Mr Andrew Burns, lead writer of the World Bank's Global Economic Prospects 2010 report, said in a telecast from Washington on Wednesday. He did not single out European countries by name.
East Asia would not be unscathed by a return to recession in the advanced economies, he said. 'That's going to have important knock-on effects in East Asia, particularly because it is a very heavy trading region.'
Bank of Korea cited the European situation in keeping its benchmark interest rate at a record low 2 per cent yesterday.
Asia will continue to lead the global rebound, International Monetary Fund deputy managing director Naoyuki Shinohara said on Wednesday.
That brings its own challenges, with increasing capital inflows and the risk of overheating if policymakers fail to take 'appropriate' action, he said in a speech in Singapore.
Source: Straits Times, 11 Jun 2010