The global financial crisis, also known as the great world recession and recovery have had a serious impact on the Asian and global economies. While western economies suffered from enormous losses, Asian economies somehow managed to turn this misfortune into an opportunity. With the rise of Asian economies, the structure of world trade and finance is rapidly changing. If Western companies are planning to become more active and successful in Asian markets, they will have to understand this environment, and adjust their business models and company structures according to these recent changes.
How did the Asian economies take care of the global crisis?
Before the global financial crisis, Asian economies were dependent on large industrial economies of the Western and the Eastern world for marketing their products and services. Their export oriented economies needed the deep and prosperous markets in the advanced industrial economies. At least a third of GDP growth in China during the pre-crisis years originated from exports and in other Asian emerging market economies (EMEs) this proportion was higher (Akyuz, 2011, p. 10). Presently the Asian economies, particularly the EMEs, depend increasingly on domestic demand (ADB [Asian Development Bank], 2012).
Asian economy did not just recover from the global crises rapidly, but also helped to go into a recovery phase. In one of his articles D. K. Das states that, “Asian economy, in particular China, provided the much-needed support to the global recovery. What is beginning to be referred to as the Great Recession would have been deeper and longer without the support of the Asian economy.” (Das, 2011).
According to Das, compared to the recovery after the Asian financial crisis (1997-1998), the recovery in 2010 was faster and stronger. One important reason behind this was that the Asian economies as well as business firms were better prepared for this crisis than they were for the Asian crisis. Second, Chinese economy played a crucial supportive role for the regional economies. It had not suffered from a recession in 2009, although its growth rate did decelerate to 9.2% and may dip somewhat further. In 2010, China had not only become the second largest economy in the world at market exchange rates but also returned to a double-digit GDP growth rate (Das, 2012, p. 444). If the Western countries were more familiar with the term “global economic crisis”, maybe they would be able to overcome the huge consequences of this crisis, just like Asian economies did. But especially the US consumers were not familiar with the term and were accustomed to spending freely, as a result when the crisis hit the world markets (again, especially the US), people were taken aback and afraid to spend any money and make any investments. So the world market could not go back its normal condition, until people felt safe to spend or invest in anything.
Current state in Asia
Asian countries not only export competitively to the rest...