It’s different this time around, or so says the WSJ. This time around, countries that produce commodities or industrial goods won’t be much affected by a US recession, in important part because the BRIC countries and others continue to have robust growth. There won’t be a domino effect this time around:

Here’s a big lesson of the first international financial crisis of the 21st century: Some old-fashioned economies are weathering the storm better than those that borrowed big to spur growth or those that bet heavily on debt-strapped American consumers…

“The remarkable difference between this period of financial upheaval and those in the past is the performance of developed and developing countries,” World Bank President Robert Zoellick said in a speech on Wednesday at the Center for Global Development, a Washington, D.C., think tank. “Not only has the epicenter of the quake shifted [away from developing countries], but so far the tremors have shaken markets differently.”…the global economy looks well positioned to weather the turmoil, unless the U.S. falls into a deep, lingering recession. The global economy is expected to grow 3.8% this year, compared with 4.7% a year earlier…

Resource-rich countries — including Russia, Brazil and Australia — are poised to keep prospering. Vast appetites for raw materials in China, India and elsewhere give commodity producers alternatives to the U.S. market, and have lessened the chance of a commodities crash…

When the U.S. economy last tanked in 2001, machine-tool maker Mori Seiki, in Nagoya, Japan, showed a loss for the first time in years. But it has since diversified its customers and this time it expects to turn a profit, says its president, Masahiko Mori. About 25% of Mori’s world-wide sales are to the auto industry, which have already been affected by a downturn in U.S. consumer spending. But Mr. Mori thinks demand from other countries will make up for this. “Of course the U.S. market is still important,” he says. “But our increase of business from BRICs [Brazil, Russia, India and China] and Europe means we’ve diversified our risk.”

Of course it just might be different this time around. The US is a smaller part of the world than it used to be, after all. But the US is still over a quarter of world GDP, and supports the growth of many of the export driven countries — so we won’t be a bit surprised if it’s not terribly different this time around.

This entry was posted on Thursday, April 3rd, 2008 at 12:48 pm and is filed under China, EU, General, business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.