By Uwe Parpart Editor, Asia Times Online Export growth is collapsing throughout East Asia - most notably Japan's, but the figures for other highly export dependent regional economies are no less discouraging. Japan recorded its first trade deficit in four years in January. Export growth in Korea and Thailand is way down as well. Demand for Asian products is down across the board, most notably in the semiconductor field.
China can afford such deficit spending.
Even if that had to increase to a level in the 5 percent of GDP range, it would not be a disaster and in line with deficits in other East Asian nations over the past several years as they attempted to spend themselves out of crisis. In 1997-98, under similar circumstances, there was widespread speculation that China would be forced to give up the renminbi peg to the dollar and devalue in order to cope with competitive pressure on its exports. Conservatives want to see a delay. Reformers want to see entry as early as feasible this year. To date, when push came to shove, President Jiang Zemin has supported the reformers around Premier Zhu Rongji.