Now we can see the strength of Asia’s recovery.
In north Asia we have China booming, Japan stuttering, South Korea, perhaps heading that way, and Taiwan growing.
In South East Asia, the economies of Asean are either doing well (Indonesia) or emerging from the slump, such as Thailand, Malaysia and Singapore.
In south west Asia we have India surging, Pakistan in trouble, Bangladesh nowhere and Sri Lanka mired in a post-civil war mess.
But the strength of the Asian rebound is now firmly pinned on China in the north and India in the south west.
Japan is a basket case, again, the rebound looks like its fading as deflation grips the economy.
The Bank of Japan moved yesterday to offer $US115 billion in short term loans to banks to try and stimulate activity and lending, but that was derided as too little and too late.
But In India, good news with strong third quarter growth.
The Indian economy grew at its fastest rate for 18 months, up 7.9% in September (the first quarter of its 2010 financial year) after rising 6.1% in the three months to June.
That’s good news for Australia as India has risen to be our fourth biggest export destination in the past year, while China has cemented its position as the number one destination.
So now Australia has two of its major export markets growing solidly, with South Korea, another top 10 market, doing well. Only Japan has not fully recovered.
China grew by 8.9% in the third quarter and there could be more this quarter.
Yesterday we saw China’s manufacturing sector growing last month at the fastest pace since April 2004.
The purchasing managers’ index released by HSBC rose to a seasonally adjusted 55.7 from 55.4. The government’s PMI, also released yesterday was steady at an 18-month high of 55.2.
On top of India’s strong growth, South Korea reported that exports gained for the first time in 13 months last month.
India’s strong September quarter growth is a long way from the 6.7% rate in 2008-09, which was the slowest for three years.
Now that growth is back on track, policymakers’ attention switches from outright growth, to watching inflation and growth.
The Reserve Bank of India forecasts inflation of 6.5% by March next year from 1.3% in October. Inflation soared to an annual rate of more than 12% in calendar 2008.
The news has increased the possibility of interest rate rises and other moves to withdraw stimulus spending.
The Reserve Bank of India has expressed concern about rising inflation and the growth figures will heap more pressure on it to start tightening monetary policy as quickly as possible.
It started winding back some of its stimulatory measures in late October.
Some economists say the growth figures have increased the chances of a rate rise by the end of this month.
In fact the surge in the quarter shattered growth forecasts in the quarter to the end of September, and was faster than all market estimates which were centered on a 6.3% annual rate.
Driving the rebound was the impact of the government stimulus, which tended to offset the continuing slide in international demand and the impact of the weak monsoon.
Manufacturing rose 9.2% from the third quarter of 2008, the biggest advance in two years.
Trade, transport and communication services grew 8.5%, the best in a year. Agriculture rose just 0.9%.
The RBI said the strong growth heavily reflected higher levels of government spending.
But it cautioned that agricultural output was expected to be far worse in the current quarter when the full impact of the monsoon would be felt.
“Clearly this is better than could have been expected and we will have to review forecasts for the full year,” Subir Gokarn, the deputy governor of the RBI, told reporters.
“The economy has started to show signs of recovery. It’s not a boom yet.
"It’s an indication that we don’t need to be in permanent stimulus and that somewhere down the line we have to think about withdrawal [of the stimulus]," he said.
A big imponderable for India is what’s happening in Dubai and the UAE.
Fears are growing that remittances and exports will fall in the coming months.
The United Arab Emirates is one of India’s largest export destinations; around two million Indians work in the country and remittances from the Gulf region are worth about $US3 billion.
The southern state of Kerala is particularly dependent on the flow of remittances from the Gulf.
Many of them work as laborers on construction projects in Dubai, which have been cut back or stopped.
