The Asian Century

Pretty much every bit of economic data that comes across my desk these days seems to back up the idea that we're very quickly headed for the Asian century. As I've blogged previously, global capital flows are falling off a cliff -- net private capital flows to developing countries, for example, will soon be negative -- a more than $700 billion drop since 2007. While Asian nations haven't been immune to this, they've been much less affected than Latin America or Emerging Europe, for example. Investors are steering what little money they have to Asia -- net portfolio investment into the region is running at a pace not seen in five years. It seems clear that Asia will recover from the recession faster than either the US or Europe, and that it will continue to leave other emerging markets in the dust, too. Korea returned to quarterly growth earlier this year, and there are positive signs in Japan, Malaysia and China, too.

I'm betting that as the region recovers, it will continue to economically align itself with China, rather than the US. America has been a major export market for Asian nations, in many cases the largest. But China is big, too, and it's interesting that the countries that are seeing the biggest fall-off in things like trade are countries like India, that depend more on the US, rather than on China.

I'm leaving for a reporting trip to Japan and China on Sunday -- more to come.