Yantian container traffic drops amid US downturn Post headline Well, yes and no, and perhaps we were asking the figures to show us what we expected to see. Yes, container throughput at Yantian has edged down a little so far this year, judging by preliminary figures, and Yantian has a particularly heavy exposure to the transpacific trade. But there are two other smaller container ports in Shenzhen and total container throughput for all of Shenzhen is still growing at about 15 per cent year on year. I'm clutching at straws, you see, for evidence that the recession everyone speaks of in the United States has finally started to have a big effect on Asia and particularly on the mainland. I don't see it yet. The retreat on regional stock markets is not really any proof of it, nor are the rapidly rising inflation rates afflicting most of the region. Both can be attributed to wider causes, such as the price of oil. Even in the United States itself, I see conflicting signals about how hard this US recession could hit Asia. The US consumer expectations index is at a record low for all data on record but retail sales are still growing, even after omitting car and petrol sales and merchant wholesalers' sales are actually soaring after you take out the cars. The only indicator I see to suggest that mainland exporters may truly be looking at a pronounced slowdown in their biggest single export market is deflated US figures on imports from the mainland. You have to take these figures from the US side as Beijing cheats when compiling them. It treats re-exports through Hong Kong as exports to Hong Kong and pretends that it has nothing to do with where they go after that. The red line on the first chart shows you a six-month average of the growth rate of mainland exports to the US if you calculate things this way. Washington does not calculate things this way and the blue line shows the growth rate you get if you take in all US imports with a mainland origin. But Washington also calculates a price index for import goods from China and in the space of barely a year this has revealed a swing from falling to rising prices. Adjust the figures for this and you get the green line in the chart. As of the end of May, US imports of mainland-made goods in volume terms had gone (barely) into negative territory. The US is now importing fewer goods from China than it did a year ago. Yet it really does not seem to make much difference. East Asia now exports US$300 billion worth of goods per month in total, an enormous figure and triple the level six years ago. The mainland's exports are the biggest single influence in this, of course but they do not explain it all. This export phenomenon is truly region-wide. And what is also clearly apparent from the figures is that the reliance on the US market is steadily declining. As the second chart shows, the US share of total regional exports has declined from 33 per cent to 16 per cent over the last 20 years and the trend is still very clearly downwards. It hasn't been Europe that has supplanted this US market. The European share of Asia's exports right now is at about the same 15 per cent at which it stood 20 years ago. It has been Asia itself that has taken up the slack. Half of all Asian exports now go to Asia itself, up from one-third 20 years ago. If I could give myself the time to explore all the trade data, I might be able to tell you precisely where these exports are going and what proportion of them consists of real final destination goods rather than just manufacturing component trade. But I don't think I really need to do this. Countries within any region tend to trade more with each other as they grow richer, and Asian countries have grown notably richer over the last 20 years. What we are looking at here is perhaps evidence that the fortunes or misfortunes of the US economy no longer have as big an impact on Asian economies as they once did. I have my fingers crossed on this call, but I think it's worth suggesting.
