The situation on the ground tells the tale.
For Wu Guo Fei and Wu Guo Cai, brothers who alter clothes at a sidewalk shop in Dongguan, China, near Hong Kong, the shock of the global financial crisis is slowly starting to fade.
From last summer until December, their monthly revenue shrank by 40 percent as some migrant workers at the nearby furniture and handbag companies, a large part of their customer base, lost jobs.
Laboring over foot-powered sewing machines made in the 1960s, the brothers fretted in the winter as workers left for unpaid vacations. But after Chinese New Year in January, the workers started trickling back. “Maybe 80 percent of the workers came back,” said Wu Guo Cai, 46.
Business is still off nearly 20 percent because of workers who did not return, but those who have come back are spending money.
“We expect manufacturing activity will continue to expand in the coming months, supported by the roll-out of the government’s stimulus,” said Jing Ulrich, the managing director and chairman of China equities at JPMorgan Chase .
Outside of China, emerging markets in East Asia are also showing signs of recovering from a steep slowdown in manufactured exports. The Taiwanese economy, for instance, shrank 10.2 percent in the first quarter compared with the period a year ago, but closer relations with mainland China have improved investors’ confidence.
Central banks across the region are maintaining low interest rates, and some, like in the Philippines, are still cutting rates to offset weak exports.
Indonesia has been insulated from the global downturn by its large domestic market and limited reliance on exports, and is benefiting from improving overseas demand for its natural resources.
In Brazil, which has been hurt by the steep drop in commodity prices, industrial production has risen every month since January, though it remains much lower than the corresponding periods last year. The government is predicting that the economy will grow 1 percent this year, down from a previous projection of 3.5 percent. Many independent analysts say Brazil will be lucky to avoid a contraction.
Nonetheless, the Brazilian stock market has risen smartly as investors regain confidence.
“We never thought it would get back to this level so quickly,” said Alessandra Ribeiro, an economist at Tendências, a consulting group. “When there was panic, investors fled to the U.S. to buy Treasury bonds and now they are diversifying again. Brazil is clearly one of those that have been chosen.”
Vikas Bajaj reported from Mumbai and Keith Bradsher from Dongguan, China. Andrew Downie contributed reporting from São Paulo, Brazil.