The recovery. A big word in Asia… When the US and Europe are walking like old men… Asia seems to be ahead.
Look at exports figures from Thailand : recovery indeed ! But thanks to only one factor : China.
China displays arrogant GDP growth figures… There is a sense of optimism when you listen to the thai government. Afterall, it’s intellectually comfortable. Let Big Brother pulls the whole region ! The differences of scale are so huge than Thailand can only profit from China’s growth…
The Prime Minister is not afraid to pull out of his hat nice GDP growth forecasts :
The Thai economy may expand by as much as 4.7% this year as exports, tourism and private investment have shown clear signs of steady recovery over the past three or four months, says Prime Minister Abhisit Vejjajiva. (Bangkok Post)
Optimism, or wishful thinking ? Why we should worry ?
Well. First because oil consumption doesn’t really reflect such optimism. And make no mistake there is no Green Economy whatsoever in Thailand.
GDP growth in Thailand is directly correlated to oil, gasoline, diesel fuel consumption.
Second, because of China. If you bet your arse on one country, then the least you can do is to try assessing the situation in this country.
And that’s precisely what the thai leaders don’t do. Or are afraid to do.
It’s easy to find several red alarms about the state of the chinese economy. People start to talk about credit bubble with frightening figures about lending, about real estate bubble with insane prices (compared to incomes) and empty cities, shopping malls etc.
But for us China seems so far away… And we shall never repeat enough this truth : China is absolutely not a “normal” country, a partner within the WTO for instance, a fair player, a democracy in the western sense…
Here is a must see work. A slideshow made by a portfolio manager.
20 slides, not 200 pages, that cover a wide array of issues. And that will give you a sense of… emergency.
If China goes down, the consequences are crystal clear : Thailand will fall too.
Now, you can pray.