Why Asia doesn't need exports to grow

With Asia's growth traditionally powered by exports, the global slow-down meant less demand for the continent's goods. But as Asia's domestic economies stage their own recovery, they will no longer be as dependent on exports to the West. Cris Sholto Heaton explains why.

Decoupling has undergone a swift fall from grace. All the rage last summer, when markets hoped that Asia could sail on as the US faltered, the idea today is about as credible as Flat Earth Theory.

So I'm reluctant to say that the phrase could make a comeback in the next couple of years. But I wouldn't bet against it. Because decoupling may not have been totally wrong just the wrong way round.

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China (CSI 300)3,128+1.6%
Hong Kong (Hang Seng)18,600+3.8%
India (Sensex)14,765+1.7%
Indonesia (JCI)2,040+2.5%
Japan (Topix)927+0.9%
Malaysia (KLCI)1,076+1.5%
Philippines (PSEi)2,477+3.3%
Singapore (Straits Times)2,318+2.0%
South Korea (KOSPI)1,395+0.8%
Taiwan (Taiex)6,464+3.7%
Thailand (SET)596+1.2%
Vietnam (VN Index)461-2.9%
MSCI Asia94+2.5%
MSCI Asia ex-Japan389+3.0%
Cris Sholto Heaton

Cris Sholto Heaton is an investment analyst and writer who has been contributing to MoneyWeek since 2006 and was managing editor of the magazine between 2016 and 2018. He is especially interested in international investing, believing many investors still focus too much on their home markets and that it pays to take advantage of all the opportunities the world offers. He often writes about Asian equities, international income and global asset allocation.

Cris began his career in financial services consultancy at PwC and Lane Clark & Peacock, before an abrupt change of direction into oil, gas and energy at Petroleum Economist and Platts and subsequently into investment research and writing. In addition to his articles for MoneyWeek, he also works with a number of asset managers, consultancies and financial information providers.

He holds the Chartered Financial Analyst designation and the Investment Management Certificate, as well as degrees in finance and mathematics. He has also studied acting, film-making and photography, and strongly suspects that an awareness of what makes a compelling story is just as important for understanding markets as any amount of qualifications.