Asia decoupling is a myth

Forget decoupling. East Asia will remain tied to demand in the US, Europe and Japan in 2011, according to Taimur Baig, Deutsche Bank’s chief economist for India, Indonesia and the Philippines.

And, “since we don’t expect much vigour in the G3, there should not be much in the way of spectacular performance in this region either”, he wrote in Deutsche Bank’s Markets in 2011 report, an inaugural publication that reviews the health of the global economy and makes predictions for the coming year. The report was released yesterday.  

Baig argues that there are still “remarkably close linkages between regional exports and external consumption”. Even investment follows the export cycle closely,...