Kai Ryssdal: This has been a very euro-heavy day in what will be a very euro-heavy week. That big meeting Friday will either wrap things up or it won’t.
But for all the talk of how the eurozone debt crisis is affecting Europe and us, we’re not the only games in town, y’know. We’ve heard scarce little through this whole thing about Asia. Economic growth there has been brisk, and so problems in the EU are kind of a mixed bag.
Our China correspondent Rob Schmitz reports.
Rob Schmitz: It’s not that Asian economies aren’t closely following what’s unfolding in Europe — it’s just that some of them are distracted by themselves.
Yang Fenghui: China is the golden market.
Yang Fenghui sees a shift in economic power towards Asia; he’s been waiting for this moment for years.
Yang hooks up investors from Finland with companies in China, and Chinese investors with clean tech companies in Finland.
Yang: Everyone in China is now talking about sustainable development and green economy, but our technology level in somehow many fields are not as advanced as some other developed countries.
Developed countries like Finland. Yang’s Shanghai office is specially designed for Finnish investors. There’s a sauna in between the cubicles where Finnish businessmen can wrap towels around themselves and escape the worries of the European debt crisis back home. Here, they can search for business opportunities in an economy that isn’t in freefall. But don’t get too comfortable.
Economist Arthur Kroeber says there are tough days ahead for Asia.
Arthur Kroeber: So we have a dual effect: one is that a big export market is seeing slowing demand, so that’s hurting exporters in the region. And then the availability of trade finance is also drying up because European banks are scrambling.
Scrambling to prepare for the losses they’ll likely take from their holdings of risky European bonds. That means less credit for Asian economies. European banks lend twice as much to Asia as they do to the U.S. and Japan put together. China’s the heavyweight of the Asian economies. It bailed out the region with a half a trillion dollar stimulus plan after the crash in 2008.
Kroeber says it can’t afford to do that again. And that probably means tough times ahead for Southeast Asian countries. But Kroeber says China is better positioned today than it used to be for a crisis like this.
Kroeber: If you go back 10 years, mainly what China was doing was exporting consumer goods to Europe and the United States.
But over the past decade, its strategy has evolved. China’s spent a lot of money developing infrastructure inside the country — and that’s created spin-off companies that can build infrastructure at low-cost overseas.
Kroeber: What they’re increasingly doing now is exporting capital goods like construction equipment, power generation equipment, telecoms, network equipment and so forth. And those exports are mainly not going to Europe and the US. They’re going to India, Brazil, Indonesia — developing countries that have huge infrastructure needs.
In the meantime, the consuming class in China and the rest of Asia is growing. And that’s good news for popular American and European retail brands. The question is: Do consumers in Asia have the buying power to rescue the West?
In Shanghai, I’m Rob Schmitz for Marketplace.
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