Recovery on the Horizon? An Analysis of the Performance of External Sectors in Asia Through COVID
HKUST IEMS Thought Leadership Brief No. 65
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Many Asian economies have performed well through COVID in terms of GDP growth, exceeding the performance of economies in other parts of the world. This is partly due to high-quality COVID management in many Asian economies but is also due to a strong contribution from export growth.
This has been supported by a surprisingly resilient globalization profile. World trade growth (excluding international tourism) has recovered strongly and is now well above pre-COVID levels. And Asian export growth has outperformed world trade growth.
In addition to the strong global economic recovery, world export growth has been supported by the rotation in consumer demand during the pandemic away from (locally produced) services towards durable goods that tend to be traded across borders. As a major production node in global supply chains, emerging Asia benefited from this.
Looking forward, however, there are several storm clouds on the horizon: post-COVID normalization of demand patterns, supply chain disruptions/costs, and risks to the global economic outlook, as well as the economic impact of the Russian invasion of Ukraine, which is likely to reduce world trade growth. And there are structural risks to Asia’s position in global supply chains. Adaptation will be required in many Asian economies in order to remain competitive, and benefit from export-led growth.
About the author
David Skilling is the Founding Director of Landfall Strategy Group, an economic and policy advisory firm that works with governments, firms and financial institutions in Australasia, Asia, the Middle East, and Europe. David has previously worked in various roles in the New Zealand Government, founded an independent economic think tank in New Zealand, and was with the McKinsey Global Institute and McKinsey & Co in Singapore.
David holds a PhD in Public Policy and a Master in Public Policy degree from Harvard University, as well as a Master of Commerce degree in Economics from the University of Auckland. David was named a Young Global Leader by the World Economic Forum in 2008.
Further reading
David Skilling observes and discusses the large variations in economic performances across Asia, with some countries doing poorly relative to the more developed Asian economies during the pandemic in the HKUST Thought Leadership Brief #63 "Asian Economies Through the Pandemic".
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