[vampyregirl]

While the economy is in recession in western nations economic growth has hit 9% in India and is at least as high in China. I expect both nations will continue their current state of growth. Why? Because they produce cheap products, that is why westerners buy them, not because they are good but because they are cheap. And with an economic slump in many western nations the demand for cheap products will only rise. If money is no object for you then you don't buy Chinese because its not the best, but you are not so fortunate you look for bargains. China and India are supplying the bargains. Therefore they will continue to boom.

[alokin]

Maybe, maybe not. If you really short of money do you then buy crab which lasts only a few month?

[americandream]

Maybe, maybe not. If you really short of money do you then buy crab which lasts only a few month?

They've a 2 billion market and counting. I dont think it really matters to them whether you buy crab or walk like one.

[mefistofeles]

I think the Forex markets could play a major role in Asian demand growth if the RMB and Indian Rupee gain 15-20% on the dollar and crude oil stays at current prices. You're talking about a huge reduction in the price of gas. In addition of other commodities prices stay at the same level then the average buying power for someone in one of these countries has just gone up 15-20%. If wage inflation continues in China and India then we could throw in another 5-10% increase in buying power.

Potentially speaking the prospects for a jump in Asian demand are quite real. Assuming that the Chinese and Indian currencies gain against the dollar and also that they can keep their economies from falling apart during this crisis.

One interesting phenomenon will be Chinese reserve growth, its supposedly stalled at 1.9 trillion dollars. If I were the Chinese central bank its hard not to imagine a better time to dispose of dollar assets.

The real question is whether or not Chinese and Indian economies can stand on their own. If they can then the potential for demand growth within the next two years is astounding.

This is not to say that their demand will definitely grow, but potentially speaking I think its far more likely that we see demand growth rather than reduction in China and India.

Also we mustn't forget Saudi Arabia and the other gulf states. Demand growth has been absolutely outrageous there so this could begin to impact the oil demand picture as well.

Overall I think oil's price doesn't reflect actual market conditions. I think this whole credit crisis has affected the pricing and delivery mechanism for oil. Not in terms of actual demand reduction but in the ability of customers to obtain and credit for purchasing fuel. Current prices are not an accurate reflection of real supply vis a vis demand, well at least that's my opinion.

[Hermes]

And by "Boom" you mean ... this?



Or was this the one you were actually pointing to:



Or maybe this beauty?



Is this the continued growth in Asia?

[mefistofeles]

And by "Boom" you mean ... this?

I believe the global credit crisis is distorting actual prices for a number of assets. If TED Spreads drop and remain like this then you probably have a point.

However I'd like to see what happens to all asset prices after the credit situation has resolved itself. This would give us a much better picture of what the "actual" economy really looks like.

[vampyregirl]

If a 9% growth rate is not a boom then what is?

[ThunderChunky]

The value of their exports will decrease...so I would guess that GDP growth wont continue at the same levels. They will grow, but not as fast.

[Starvid]

The value of their exports will decrease...so I would guess that GDP growth wont continue at the same levels. They will grow, but not as fast.

China has a very good opportunity to keep the economy humming with domestic demand instead of exports.

[cube]

The value of their exports will decrease...so I would guess that GDP growth wont continue at the same levels. They will grow, but not as fast.

China has a very good opportunity to keep the economy humming with domestic demand instead of exports.

I disagree.

Through out history nobody has ever been successful selling anything to the Chinese.
In fact the Chinese aren't even successful at selling anything to the Chinese if that makes any sense.
There is one exception, and that would be the British selling opium.

[kublikhan]

While the economy is in recession in western nations economic growth has hit 9% in India and is at least as high in China. I expect both nations will continue their current state of growth. Why? Because they produce cheap products, that is why westerners buy them, not because they are good but because they are cheap. And with an economic slump in many western nations the demand for cheap products will only rise. If money is no object for you then you don't buy Chinese because its not the best, but you are not so fortunate you look for bargains. China and India are supplying the bargains. Therefore they will continue to boom.

Wrong. India is already slowing down. 7.5% growth earlier this year, before the worldwide economic crisis went into full swing. 5-7% projected going forward.

New Delhi, Oct 1 (IANS) The financial tsunami in the US, which threatens to engulf Europe, will slow India's economic growth to about 5-7 percent, economists and analysts said. 'It is not just financial markets, there is now a process of adjustment in the real economy as well,' said Partha Mukhopadhyay, an economist at the Delhi-based think tank Centre for Policy Research.
'Economic growth is likely to be in the region of 5-7 percent,' Mukhopadhyay told IANS. 'Certainly, six percent growth is not the same thing as nine percent growth.'

US crisis Will Slow India's Growth


China growth is slowing as well:

SNOWDON: Some economist are forecasting just 8 per cent growth for China next year, down from 12 last year. China too is taking action. Authorities have cut interest rates twice in a month. Policies that tried to limit the amount of hot money flowing into capital works have been partially reversed to boost investment. Yet businesses are closing, jobs are disappearing, house prices are falling, the stock market has lost half its value this year. Professor Zhang Jun, Director of the China Centre for Economic Studies at Fudan University says east coast companies are already suffering as exports shrink. 50% of toy manufacturers for example have closed this year, a combination of product recalls and lower demand.

World Worries As China Growth Slows

[alokin]

If the Chinese sell their stuff to the Chinese and the same with India their trade surplus would be negative very soon, provided that both have to import most of their oil. They even would begin to live on borrowed money like the US??
It's all a big riddle, and we should have more Asian posters!