Economic issues will be front-and-center on the president's first trip to Asia. In Singapore, Obama will attend a key financial summit, while in China and Japan he will meet with the two largest foreign holders of U.S. government debt. In South Korea he will encounter a country that has been the subject of a stalled free trade agreement with the U.S.
Asia, as the fastest-growing economic region in the world, is the continent that could lead the global comeback from the current crisis since the region is recovering faster than the United States and Europe.
In the past, for example, U.S. consumers have traditionally spent heavily on Asian exports, but now the tables are turning. Over the course of the current downturn, more than $15 trillion in U.S. household wealth has evaporated, so battered consumers are now spending far less money – and saving far more. The world, U.S. officials have warned, can no longer count on the American consumer to drive the global economic recovery with their loose purse-strings.
Noting that G-20 nations agreed at September's summit in Pittsburgh to work towards strong balance and sustainable growth as the world rebounds from the crisis, a White House official this week explained what that agreement means for the U.S. and Asia.
"That means for the U.S. that savings will increase and exports will increase. And very importantly, for a number of countries in Asia, it means that domestic consumer demand and imports will increase," said Michael Froman, deputy national security advisor for international economic affairs, at a briefing with reporters on Monday. "So our engagement there, the president's engagement in the region, is focused on making sure that countries are pursuing balanced growth going forward, opening their economies, allowing us to expand our exports to the region and create more export-related jobs here at home."
If Asia grows at a rapid rate – and the forecast is for a 7 percent growth rate next year – then the U.S. might be able to ride the wave of the Asian recovery to a faster recovery of its own.
Asia currently receives about 25 percent of U.S. exports, so as Asia grows, the number of those exports should also increase. As those exports rise, so too would U.S. jobs connected to Asian exports, which now stand at 1.6 million.
While it would be a departure from the past for the U.S. to ride Asian spending to economic growth, such a scenario would still be a welcome development for the ailing US labor market, with unemployment currently at a 26-year high of 10.2 percent.
Before departing for Japan on Thursday, President Obama spoke at the White House about the discussions he planned to have with foreign leaders on a strategy for future growth.
"It's a strategy in which Asian and Pacific markets are open to our exports – and one in which prosperity around the world is no longer as dependent on American consumption and borrowing, but rather more on American innovation and products," the president said. "It's through these steps with our partners, in addition to the work we're doing here at home, that we will not only revive our economy in the short term, but rebuild it stronger in the long term."