Asia hunts for hunt new markets amid European crisis

As European leaders battle to save the euro, some Asian companies are already hunting out new markets around the globe in the face of declining orders from the troubled eurozone.Analysts say that increasing regional trade and expanding links with other emerging economies will help Asia weather the storm in Western markets and a possible disintegration of the 17-nation euro area.Asia enjoys healthy foreign reserves, low debt levels and a stricter regulatory and corporate governance regime put in place after the regions own financial crisis in the late 1990s. But in common with governments around the world, Asias private sector does not want to venture into the unknown and hopes for decisive action from the EU summit which wraps up later Friday in Brussels.Siddiqur Rahman, acting president of the Bangladesh Garments Manufacturers and Exporters Association, said orders from the worst-hit nations such as Greece, Italy, Portugal and Spain had already sloped off.In many cases, buyers have delayed orders, or deferred the export payment or simply cancelled them. Many have also cut order prices by 5-10 percent, he told AFP in Dhaka.Asia is already feeling the headwinds from the two-year-old eurozone crisis, which the Capital Economics research house said could force Greece to exit the single currency next year, followed possibly by Portugal and Ireland.The leaders of China, whose export-driven boom has made it the worlds second-largest economy, say they are looking to boost trade with emerging markets to cushion the impact of the downturn in Europe and the United States.Next year I think that we will face severe challenges in our exports and imports, said Wang Shouwen, director of the Chinese commerce ministrys foreign trade department.However, some developing and emerging economies are enjoying sound economic performances so we will attach more importance to exports to these countries.The Asian Development Bank said a strategy of increasing intra-regional trade and financial integration, and expanding links with other emerging economies would help the region offset the woes in Western markets.Chinese textile firm Shenzhen Welltex Housewares says orders from Europe started to fall off sharply in October and it is casting the net wider in search of alternative sales.Our company used to mainly serve the European market, but now we are changing our strategy to target markets in countries like Russia and Brazil, where -- on the contrary -- the orders are increasing, company manager Zeng Xiangjin told AFP.The European problem seems to be worsening, he added. More European customers have cancelled or postponed their orders because they might not do well in obtaining financing.Asian exporters said they were more worried about a sharp drop in demand from Europe rather than the outright collapse of the euro, given they trade mostly in US dollars. But the knock-on effects of a eurozone meltdown would be felt far and wide, for Asia and the rest of the world.It could plunge the world economy into a severe recession similar to 2008-2009, said Rajiv Biswas, chief Asia-Pacific economist at IHS Global Insight in Singapore.Large-scale writedowns of eurozone sovereign debt would escalate the deleveraging of European bank balance sheets and create a protracted credit crunch and freeze in global credit markets, he said.For now, some like US ambassador to Singapore David Adelman are accentuating the positive.What Im hearing from the American business leaders here in Singapore is the operations and the sales in Southeast Asia continue to be a bright spot in an otherwise not so bright environment, he told reporters.And Asia is less exposed to chill winds from the West than in decades past.Asia is not decoupled from America and Europe. But while Asia is not decoupled, it will not derail either, said Ravi Menon, managing director of the Monetary Authority of Singapore, the city-states de facto central bank.