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Global financial woes take heavier toll on export-reliant Asia
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19:40, February 11, 2009

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The global financial crisis and economic downturn, which escalated in 2008 and plagued nearly every part of the world''s economy, showed no particular sign of recovery after the first month of 2009. And Asian economies are even harder hit.

Economic data released in past weeks indicated a worse-than-expected fallout of the crisis on Asian economies, as they are heavily reliant on demand from the United States and Europe, which are both mired in recession now.

Japan, the world''s second largest economy, is in the midst of its first recession in seven years as the global economic slowdown sharply reduced overseas demand for cars, electronics and other key exports. In the past weeks, a slew of grim earnings reports from the country''s corporate heavyweights added to the woes.

Toyota Motor Corp., the world''s No. 1 automaker, for example, reported a 164.7 billion yen (about 1.8 billion U.S dollars) loss for the October-December quarter, down sharply from the 458.6 billion yen (about 5.01 billion U.S. dollars) profit for the same period the previous year.

Sanyo Electric Co. logged a net loss of 14.3 billion yen (about 156.2 million dollars) for the three months to December, against a year-earlier profit of 12.8 billion yen. Another electronics giant NEC Corp. announced that its quarterly loss swelled to 130 billion yen (about 1.42 billion U.S. dollars).

As a result of these awful earnings reports, rampant job shedding is underway to cut costs and reshape the companies'' business. Panasonic is slashing as many as 15,000 jobs, about five percent of its global work force, by the end of March 2010. Sony is cutting 16,000 jobs and NEC, as many as 20,000 jobs.

The exports of South Korea, Asia''s fourth largest economy, plunged a record 32.8 percent in January from a year earlier, the steepest drop since the country started announcing monthly tallies in 1980. Its exports dropped 17.4 percent in the last month of 2008 following a 18.3 percent decline in November.

South Korea''s finance ministry acknowledged the economy faced a growing risk of recession as domestic demand and exports took a steep downturn. The state-run think tank Korea Development Institute said it appeared already to be "in a recessionary phase."

The International Monetary Fund (IMF) had sharply downgraded its growth forecast for South Korea to a contraction of 4 percent.

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