The ‘real’ intra-Asia trade

It seems even the most optimistic in the air cargo industry have reset their viewpoints with a reality check. The oft expressed sentiment from a few months ago that the market has bottomed and will see some pickup sometime in the fourth quarter has quietly faded, replaced by the ‘hope’ of some recovery early next year. But the bigger fear of course is of the euro-sky falling.


The ‘real’ intra-Asia trade


It seems even the most optimistic in the air cargo industry have
reset their viewpoints with a reality check. The oft expressed
sentiment from a few months ago that the market has bottomed
and will see some pickup sometime in the fourth quarter has quietly faded, replaced by the ‘hope’ of some recovery early next year. But the bigger fear of course is of the euro-sky falling.

Many point to the most recent economic contagion of 2008-2009
where Asia, with the exception of Japan came through the crisis in pretty decent shape, as a possible outcome of another crisis, this time euro-inspired. But for at least one economist – Stephen S. Roach, former chairman of Morgan Stanley Asia and the firm’s
chief economist – the possible crisis sparked by a Greek withdrawal from the eurozone – would be very serious indeed for Asia, he argues.

Financial and trade linkages make Asia highly vulnerable to Europe’s problems, with European banks funding nearly nine per cent of total domestic credit in developing Asia – a full three times the share provided by US banks. And of course European banks play a massive role in the Asian banking hubs of Singapore and Hong Kong.