Asian Trade is Blossoming

A state of heightened hostilities stemming from contested territorial claims and clashing strategic visions has not prevented China and Japan from raising the volume of their bilateral trade by 7.5 percent in the course of last year. The coming months could be even better: Japan’s sales to China soared 20.8 percent in January from the same month of 2014.

That is a remarkable and a very encouraging signal. It shows that purely economic factors – such as China’s sustained growth of domestic demand, the two economies’ broad complementarities and the yen’s 16 percent depreciation against the yuan in the last twelve months – have prevailed over serious security problems and the countries’ increasingly competitive diplomacy with respect to regional and global issues.

Even more interesting is to note that similar tensions have not negatively affected trade relations between Japan and South Korea. Last year, their two-way trade was roughly unchanged from 2013, and the trade flows between these two countries continued to grow in January of this year.

CNBC

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