The Foreclosed Economy in USA is Making Asia Do some Rethinking

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Julie Parker

Julie Parker was born in March 19, 1983, in Lancaster – Los Angeles County, California. Her father is an experienced economist and businessman, who motivate her taste for the real estate market. Recently, graduated in Economics and now focus her studies in a PhD. Now she’s a consultant and webwritter of ForeclosureListings.com

The foreclosed economy in USA is making Asia do some rethinking, put a halt on its factory frenzy and turn to the service sector. Unknowingly the turn of events is going to benefit planet Earth – both in the East and the West.

Just a couple of years ago an idyllic village on the outskirts of Guanzhou, China was overwhelmed with jumbo building activity – cranes, factories, highways and noise. The export frenzy had gripped the policy makers. But with the credit crunch in USA, people there are not buying goods. Exports are falling and continuing to do so. It is these exports that fueled the recent Asian growth.

Japan was the first to learn the trick in the 19th century that increase of exports in comparison to imports led to earning of foreign exchange. With this more new machinery and know-how could be bought enabling competition on a global scale. Japan became the leader goose in this theory and was soon followed by the other geese – South Korea, Taiwan, Hong Kong and Singapore. The latter were the Dragon economies. Soon the Tiger economies of Malaysia, Indonesia, Thailand and Philippines followed the Dragon.

In the 1990’s China came out of its isolation and joined the bandwagon. It became part of the Asian Global Supply Chain. Cheap labour and SEZ or special economic zones set up by the policy makers spelt success. India became part of the chain in the service sector (IT) while East Asia focused on textiles, electronic and consumer goods. This led to the countries and the entrepreneurs in it to become very rich.

But soon realization dawned that possessing green bucks does not always translate into wealth. There were risks attached. The paper money could be devalued at any moment.

There was another factor – more manufacturing meant cutting down more trees, polluting waterways and harming the environment in such a way that it led to higher medical bills.

Thus foreclosures in America have led to a rethinking about the consequences of this massive Asian Supply Chain. Even a couldn’t-care-less attitude to the environment will make the beneficiaries wake up to the fact that there are no customers in the west to buy eastern goods.

There is a rumbling and grumbling among the masses. Rural folks are not happy when they send their children to cities with dreams that end up in them becoming drug traffickers and prostitutes. The ideal of the middle class remains the Texan scoundrel and it will take quite some time to realization to dawn that the real economy is not always paper money.