Asia may be the world's fastest growing region and biggest market with booming regional trade and plentiful foreign reserves, but it is still far from being self-reliant, experts say. Some Asian pundits have argued that the potentially large spending power of the region of nearly four billion people may help it weather a US slowdown and soften the impact of a global downturn.
They cite rapidly growing China and India, the world's two most populous nations, and the explosion of trade between China and other East Asian nations to support the view that Asia is decoupling from the global business cycle.
But new studies by the Asian Development Bank (ADB), the International Monetary Fund (IMF) and private economists strongly challenge the theory.
"We find that contrary to what is generally perceived to be emerging wisdom in developing Asia, the relationship between Asia and the industrialised north has in fact increased" since 1997, the ADB's chief economist Ifzal Ali said at a forum in Washington.
"There is a school of thought emerging in Asia that there is an uncoupling of Asia from the industrial nations for two reasons," he said.
"Asia is growing so rapidly that it has more weight on the global system, and secondly, the rapid increase in regional trade is substitute for trade with the industrialised world," he said.
But he insisted ties between Asia and the "industrialised north" have "increased since the 1997 crisis (rather) than decreased."
Asian nations plunged into financial turmoil 10 years ago as their currencies rapidly depreciated against the US dollar, but they have bounced back through a variety of reforms underpinned by strong growth and more effective fiscal and monetary policies.
Even though intra-regional trade in Asia has since experienced booming growth, it comprised largely that of "intermediate" goods shipped to China for final assembly, many of them destined for the industrialised West, Ali said.
Only about a fifth of Asian exports actually end up in Asia, he said - the rest end up in industrialised countries, mainly the United States, the European Union and Japan.
"So, in terms of the structure of trade and direction of trade, the relationship (between Asia and the industrialised economies) has strengthened," he added.
Stephen Roach, the chief economist of US investment bank Morgan Stanley, warned in a recent report that internal pressures building in Asia's fastest-growing economies could be sowing the seeds for slower growth ahead.
"In particular, both the Chinese and Indian economies are now displaying worrisome signs of overheating," he said. The two Asian giants make up about 21 percent of the world's total value of goods and services.
Roach also underlined the region's persistent reliance on external demand, citing again China, which is "at the top of the external vulnerability chain."
The United States is China's largest export market and as the US economy now slows, "the biggest piece of China's export dynamic is at risk." So too are large parts of China's supply chain in Asia - especially Taiwan, South Korea and even Japan, he said.
The IMF said that while the five largest emerging market economies now account for one quarter of global GDP, their role in global trade is only about one-seventh.
"It is difficult to argue that they could entirely replace the US economy as an engine for global growth," it said in a new study on how far countries can "decouple" from the US economy.
Ali said the ADB study found that it is globalisation, technological change and competition that are fuelling regional integration in Asia. "While much is made about regional integration in Asia, it is driven by market forces and not by preferential trading arrangements," he said. "We would like to put this uncoupling hypothesis to rest here. There is no sign of uncoupling," he said.
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