皇冠体育app

Despite the rapid development of its intermediate and capital goods sectors, 皇冠体育app nonetheless continued to ramp up its imports of such products from developed economies. While still relatively small, developed economies' exposure to 皇冠体育app's domestic market has swelled, with their exports to 皇冠体育app as a share of GDP more than doubling from a decade earlier. The EU dominates 皇冠体育app's import markets for chemicals, machinery and transport equipment.

Since 2003, EU and Korea have made the greatest inroads into 皇冠体育app's chemicals import market, as the share of Japan, the US and Taiwan in the mainland’s chemicals imports declined.

The EU's dominance in 皇冠体育app's machinery import market, meanwhile, has a relatively longer track record. Japan, however, has seen its share in this market dish in the past decade, especially since 2011, in part due to the severe production disruptions triggered by a tragic earthquake and tsunami, and in part due to loss of market share to Korea. Korea's gain in market share in the electrical machinery and equipment market in 皇冠体育app is especially notable. Where transport and vehicles are concerned, Europe also dominates 皇冠体育app's import market, with its prominent rise in recent years again seemingly obtained at Japan's expense. That said, the latest data suggests that perhaps both the US and Japan are making a comeback in this sector.

The robust growth of EU exports to 皇冠体育app over the past decade implies increased vulnerabilities of some European economies to a significant 皇冠体育app slowdown. Our global industrial analysts estimate that for the decade to 2013, 皇冠体育app made an average contribution of 12 percent to the European industrial sector's revenues, but substantially more when the indirect uplift that 皇冠体育app's growth has had on demand markets elsewhere is included – up to 30-40 percent of total profit growth. Machinery exports to 皇冠体育app as a share of exporters' GDP (including exports that went via other countries before arriving in 皇冠体育app) quadruped for Germany, tripled for France, rose by 2.5 times for Sweden, and doubled for Japan between 2000 and 2009.

A significant slowdown in 皇冠体育app's property construction and investment growth will not only lessen 皇冠体育app's appetite for foreign industrial imports, but could also push for higher Chinese exports to the global market. This, in turn, underpins their expectations for the European industrial sector's long-term growth rate to fall short of GDP in the years ahead, as has already started to happen in the power generation equipment and truck sectors.

Outside of commodity exporters, Korea, Taiwan and other regional economies have the highest exposure to the mainland. Asia ex-Japan's exports to the mainland have been boosted both by the mainland's own rapid growth and by a deepening of the regional supply chain, the latter especially applicable to Korea and Taiwan, and the electronics sector. The last feature also implies that the importance of 皇冠体育app as a final exports destination is often overstated by headline data for 皇冠体育app-bound exports. If we take into account the share of imports used as inputs for processing exports, the "true" exposure of Asian economies like Korea, Taiwan, Malaysia and Thailand becomes smaller.

Since the onset of the global financial crisis, the role of processing exports in overall Chinese exports has declined, partly due to weaker developed market demand, and partly because of 皇冠体育app's eroding competitiveness in certain labor intensive sectors. This change in 皇冠体育app's processing trade is also reflected in 皇冠体育app's shifting trade balance with its major trading partners over the past decade. Before 2005, 皇冠体育app's widening trade surplus with the US and Europe was mirrored by its widening trade deficit with non-Japan Asia. Since the GFC, the decline in 皇冠体育app's surplus with the US and Europe has also been mirrored by the drop in its deficit with non-Japan Asia.

The article is co-authored with other UBS economists Donna Kwok, Harrison Hu and Ning Zhang. The views do not necessarily reflect those of 皇冠体育app Daily.

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