What are the forces moving the Minnesota economy? Adam Belz tries to identify the trends and show the connections between Minnesota and the larger U.S. and global economies. You can connect with him on Twitter: @adambelz

MN exports to Southeast Asia fall as tensions rise in China's seas

Posted by: Adam Belz under Business trends, Economics Updated: August 28, 2012 - 4:41 PM

 

A boat, center, is surrounded by Japan Cost Guard's patrol boats after some activists descended from the boat on Uotsuri Island, one of the islands of Senkaku in Japanese and Diaoyu in Chinese, Wednesday, Aug. 15, 2012. (AP Photo/Yomiuri Shimbun, Masataka Morita)

A boat, center, is surrounded by Japan Coast Guard's patrol boats after some activists descended from the boat on Uotsuri Island, one of the islands of Senkaku in Japanese and Diaoyu in Chinese, Wednesday, Aug. 15, 2012. (AP Photo/Yomiuri Shimbun, Masataka Morita)

Minnesota's exports to Southeast Asia have abruptly fallen as territorial disputes roil the seas around China.

In July, the Association of Southeast Asian Nations could not come up with a unified statement about China’s maritime claims in the South China Sea. 

Vietnam, the Philippines, Malaysia, and Brunei, as well as Singapore and Thailand, have claims on the trade routes and potential oil riches of the contested body of water, and wanted ASEAN to criticize China’s actions there.

Cambodia, supported by Laos and Myanmar, does not want to criticize their neighbors to the north. Indonesia has yet to weigh in. The Council on Foreign Relations called the impasse "disastrous." 

It's important to note that the nations who want to speak out against China are mostly major trade partners of the U.S., especially Malaysia and Singapore.

Meanwhile, Japan and China are arguing about a series of islands in the East China Sea. Neither country appears to be backing down. MSNBC has a good run-down of the issues.

In Minnesota, exports to Southeast Asia are down 15 percent through June compared to last year. U.S. exports to Southeast Asia are down 1.5 percent over the same period.

The decline is more dramatic for Minnesota considering the recent growth of the region as an export market. Exports to the ASEAN nations grew more than 30 percent in 2010 and 2011. By the end of 2011, sales to countries like Malaysia, the Philippines and Thailand had risen 65 percent compared to 2007. 

 

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