ABSTRACT
Resource booms generate the Dutch disease and increase vulnerability to resource price shocks in resource-dependent countries. This chapter analyzes whether both the global resource boom from 2003 and 2008 and the China-induced boom between 2009 and 2013 caused these effects in the Asian-Pacific region. It considers the three coal and gas exporters of Australia, Indonesia, and Kazakhstan, the two natural gas exporters of Myanmar and Turkmenistan, and the coal exporter of Mongolia, employing a trade specialization coefficient (TSC) and a relative comparative analysis (RCA) to analyze the impact on export competitiveness by industry. Results reveal that all six countries suffer from real appreciation and the Dutch disease, face stronger export specification in resource extraction sectors and low value-added primary and industrial sectors, and exhibit an increasing trade dependency on China – all of which make them more vulnerable to resource price shocks. The extent, however, depends on the type of fuel for export, the resource dependency in its export, its initial industrial structure, international competitiveness, macroeconomic management, and resource governance. China has acquired assets, resources, and infrastructure in exchange for reducing its trade deficit, but have provided little, if any, effective countermeasures to allow these countries to escape the Dutch disease.
