Perceptions about Asia=s growth prospects may have begun to shift after export growth
slowed abruptly in 1996. Export growth rates (in value terms, measured in US dollars) dropped
sharply in Korea, Malaysia, China, and especially in Thailand (where the value of exports actually
fell 1% in 1996 after expanding by 25% in 1995). In Indonesia, export growth had slowed less
sharply, but the slowdown had started in 1993. In Korea=s case, the slowdown was mainly due
to a drop in export prices, itself partially due to Korea=s over-investment in some sectors,
especially semiconductors. For example, world prices for semiconductors fell 20% between 1995
and 1997 after rising sharply in the early 1990s. Malaysia, too, suffered mainly from weak prices.
By contrast, Thailand=s export prices remained stable, but export volumes dropped sharply.
Indonesia=s slower growth was also mainly due to sluggish volume performance.4