Chinese Growth Cannot Save Asia-UBS

China's economic growth, expected to be about 10 percent a year through 2010, ``doesn't offer the rest of Asia guaranteed protection from a coming global slowdown,'' UBS AG said in a report.

Though imports should increase relative to exports, benefits to Asia-Pacific nations vary widely based on the types of products China is buying, Jonathan Anderson, UBS's chief Asia economist based in Hong Kong, wrote in the report.

The chart of the day shows the ratio of exports to China relative to total exports of Australia, Japan and South Korea. The starting date is in July 2005, when China ended the yuan's peg to the U.S. dollar. As a percentage of their total exports, Australia had the biggest increase, while Korea's relative reliance on China fell.

Among the countries plotted, Australia's exports -- mainly commodities -- would be most resistant to a global downturn, as the vast majority are used within China, the report said. Korea could suffer most, along with Taiwan and the Philippines, because about two-thirds of the goods they sell to China ``are quickly re-exported back to global markets.''

``Taiwan, the Philippines and Korea actually have the lowest `domestic' exposure to China, since these economies primarily ship electronics components and other inputs,'' Anderson wrote.

``Brazil, Australia, India, Indonesia and Russia all have exposure of 80 percent or higher to the domestic economy, since they sell minerals, fuels, metals and other materials that go into general construction and infrastructure,'' the report said.

That won't make exporters of commodities immune to a global slowdown, though, as they sell a smaller proportion of their goods to China than electronics manufacturers, the report said.

``There is no longer a clear-cut case for the mainland as a savior from global slowdown pressures, even in the nearest neighboring countries,'' the report said.