Long-run Possibility of Economic Recovery: Western or Asia?

Surely, while some countries like United States and Europe are now struggling with debt crisis and unstable security market, many Asian countries, however, are enjoying growth such as China, India, Brazil, and to name a few of other emerging countries. Many scholars and people in Asia are very proud of themselves that they are considered as the head machine of economic recovery especially China. Are they really the head machine in the present time? Probably! Are they going to last long...? Maybe not!

 

It is true when people talk about how impressive regarding the economic growth that China has enjoyed so far, almost double digit of GDP growth even with a huge stimulus package. People in Asia are acknowledged to be a very good saver, they are so good in saving every penny they can earn and spend it very wisely. Saving = Investment, so in case like today crisis, Asian people can spend more money while others in West are stuck with the crisis. Nevertheless, they are just too happy for that. Thing has changed, Chinese people are very happy with that impressive economic growth; more and more of them now have started to consume a lot more than ever, also on American products. Now the inflation rate is still high, the debt ratio to GDP is pretty much increasing, uncertainty of property boom, and also the decrease of savings for future investments; people have no saving for preparation, and can you imagine how things can be affected when this bubble economy maybe burst one day?

Now let's turn our attention to quiet United States and Europe, it seems like there is going to have the second wave of currency war. I think it is just the game made by the U.S politicians. U.S wanted to inject more dollars into the economy to have their currency get cheaper to be more competitive with China Yuan, and she did it not through QE3, but something like a game which was a deal that reached at 11^th hour. At the time, many countries were fearful about the collapse of dollar and rushed to buy gold, South Korea especially, and then the dollar flowed out in no time. Now the dollar is cheaper just like what Washington wants. United States now again can get back on track on her manufacture sector, the new cycle economy for U.S has begun. They make Asian to be much happier in a while to consume more of U.S and Western products like the case in China. U.S producers now can employ more workers because the demand of their products is increasing. At the same time, people in China and some other emerging countries will turn to a more consumed-economy rather than to produce and use their own products. If there is another QE3 in the future, I do not think that Asia countries can have the power to respond to its consequences. 

Well, here I just to come up with a short conclusion that the trend is showing that the United States and Western Europe are becoming more export-driven economy, as China is shifting her economy from investment and export-driven-economy to consumer driven-one for reasons I have briefly discussed above. So who do you think is going to bounce back? Western or Asian?