Tamed Tigers, Distressed Dragon

How Export-Led Growth Derailed Asia's Economies

Workers hang on ropes as they assist heavy machinery in arranging cargo containers at a shipping yard in Cavite city, south of Manila July 23, 2015. Romeo Ranoco / Reuters

Of all the unprecedented things that have happened during the global economic crisis, perhaps the most startling and ominous so far occurred in early 2009: shipping rates between southern China and Europe temporarily fell to zero dollars. As consumer demand in the West dried up and exports dwindled, brokers actually waived the transport fee and only charged a minimal handling cost. By April, hundreds of empty ships, representing over ten percent of the world's cargo capacity, floated idly in Asian waters. After traffic in South Korea's Pusan Harbor, one of the world's busiest, dropped by 40 percent in March, the port ran out of space to store the 32,000 unused containers that had piled up.

The collapse in shipping is more than simply a proxy for the woes facing the global economy; it also underscores the degree to which Asia is bearing the brunt of the global slowdown. On an annualized basis, Taiwan's

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