Asia, led by China, has long been the world’s most dynamic trading region. But exports this year have posted their worst performance since the 2008-09 financial crisis, falling 7.7 per cent in July to register a ninth consecutive month of year on year falls in US dollar terms, according to data compiled by Capital Economics, a research company.
The deepening trade recession suggests a further leg down in a vicious circle of cause and effect that is afflicting emerging markets the world over, not just in Asia. Weakening currencies are failing to boost exports but nevertheless driving down demand for imports, thus reducing aggregate demand and worsening disinflationary trends.