The latest bad news about the Japanese and U.S. economies is deepening the gloom among finance ministers at the Asia Pacific Economic Cooperation meeting in China. In the past, a strong U.S. economy was an engine for economic growth for American trading partners. But rising unemployment and falling stock markets in the United States have APEC members scrambling to find another path to prosperity.
China's Finance Minister Xiang Huaicheng says the finance ministers have a tough job ahead of them. Mr. Xiang says major APEC economies are already feeling the stresses of the global economic slowdown.
The U.S. economy is of particular concern to APEC members, because in the past, Asian nations have been able to boost their economies by increasing exports to the huge U.S. market, but U.S. demand for imports shrinks during an economic slowdown. Unemployment in the United States rose to the highest rate in four years, according to the latest figures, and stock market prices have fallen sharply.
Australian Treasurer Peter Costello calls the situation "serious." "You have seen a big lift in unemployment in the United States just in the last 24 hours," he said. "The Japanese economy contracted by .8 percent in the most recent quarter. A good deal of the Asian region is now in recession, including Singapore and Taiwan. And the outlook in the region, and indeed in the world, is quite serious."
According to Mr. Costello, Australia and China are exceptions to the generally gloomy economic outlook among Asia-Pacific nations. "If you look through the region, China is still growing strongly, which is good," he said. "A big part of that is that it is starting to open itself up to international trade."
Mr. Costello stresses that China's huge size makes it less vulnerable but not immune to the global downturn that is hurting smaller nations.
APEC's 21 member nations include countries from around the Asia-Pacific region, from Japan to Papua New Guinea, and Canada to Chile. The ministers' meeting continues through Sunday.