the asian economy revealed by the crisis the backdrop to this swift recovery staged by the asian economies lies in a number of strong attributes that they possess. firstly, asian economies have great dynamism. since the beginning of the 21st century, they have continued their dynamic economic growth, rising to become central forces in the world economy. basically, this comes from the epoch - making expansions in the extent of their market opening and liberalization. these policies have spurred freer movement and better allocation of resources, which is giving asian economies improved opportunities for higher economic growth due to greater competitiveness. what is more, the asian economy including china possesses a vast market, that is not yet saturated. this means that, as asian economies ’ incomes increase in the future, rapid growth of their domestic consumption markets is possible. for example, the increase in exports to china caused by its policy of expanding domestic demand has also served as a source of regional growth momentum. in addition, the asian economy holds abundant potential in terms of supply. there is plenty of capacity for a continual supply, on a large scale, of well - educated, disciplined and low cost human resources, in addition to asian countries ’ own considerable capital resources accumulated in the course of rapid economic growth until now. the asian economies, being still in their comparatively youthful stages of growth, generally differ much from the majority of advanced economies that have already matured. over and above this, taken together asian economies possess mutually complementary economic structures, as they are at various different stages of development. east asian intraregional trade has grown rapidly since the turn - of - the - century, with the formation of a vertically integrated division of labor centering on parts and components. the weight of intraregional trade among non - japan east asian countries has risen steeply, from 31. 7 % in 1990 to 42. 0 % in 2008. meanwhile, however, this recent financial crisis has also served to throw light on certain weaknesses of the asian economies. the asian economies here are the same as the category used in box 1 of the imf ’ s world economic outlook ( weo ) update on july 2010. the growth rates and growth contributions are from the weo ( april 2010 ) and the weo update ( july 2010 ). the external dependency of asian economies is very high, first of all, because of their pursuits of export - led growth strategies. this has meant that they have weak foundations for domestic driven growth, due to the relatively small sizes of their

the imf, the sovereign debt problems of certain eu member states are likely to act as a factor making for market unrest for a considerable time to come. – if eurozone debt problems do worsen, there is the possibility that the credit risk of newly emerging market countries would also increase owing to a strengthened preference for safe haven assets. ( qe2 ) the global financial markets are likely to react extremely sensitively to the direction of the us fed ’ s monetary policy ahead of the expiry of the second quantitative easing at the end of next june. – market attention may well focus on whether or not there will be further quantitative easing ( qe3 ). 3 commodity markets international oil prices are forecast to maintain their upward trend in line with the continued recovery of the world economy and the increase in global liquidity. next year demand for crude is likely to surpass supply albeit only by a small margin, led by the emerging market countries ( + 500, 000bpd ). – the fact that the oecd countries ’ oil inventories are now at their highest level since 2005 will act as a factor limiting the scale of upward movement in the oil price. global liquidity, which has expanded greatly in line with qe2, could put upward pressure on oil prices if it feeds through into commodity markets. in the announcement of the federal reserve ’ s fomc for november, mention is made of the possibility of additional steps in accordance with future economic activity. 2. domestic conditions fiscal spending budgetary expenditures next year will be increased 6. 0 % over this year ( 260 trillion won ) to 276 trillion won while for the year 2012 there will be a 4. 0 % increase to 287 trillion won. the extent of the front - loading of fiscal spending during the first half of 2011 will be gradually scaled back so that around 2012 it will be back to its pre - crisis level. 4 the ratio of the fiscal deficit to gdp will decline from 1. 9 % this year to 1. 6 % in 2011 as tax revenues increase 5. the sovereign debt ratio will decline from 36. 1 % this year to 35. 1 % next year. for the years 2004 – 07, the front loading of expenditures during the first half averaged 53. 7 %. the government intends to achieve a balanced budget by 2013 or 2014. household consumption household purchasing power is forecast to expand thanks to higher incomes resulting from the continued economic upswing. households are also expected to become more consumption - minded.