While there is no doubt that weakness in the developed economies would have an adverse effect on Asia’s growth prospects, we should not lose sight of the fact that most of the growth in the larger Asian economies comes from their own domestic demand.
In the case of China, for example, domestic demand contributed on average close to 9 percentage points per annum to growth over the past decade, while net exports contributed about 1 percentage point (see Table 1). Importantly, the authorities in most of these countries have plenty of scope to pursue policies that sustain domestic demand.