China’s economic slowdown begins to hit Asia’s export hubs even before trade war begins to bite
- South Korea, Malaysia, Singapore and Taiwan among those heavily exposed to China, even before trade war with the United States begins to take hold
- Lead economist at the Asian Development Bank says ‘it’s difficult to find anything positive to bank optimism on’ in emerging Asia
The stuttering Chinese economy is having a knock-on effect throughout Asia, with many emerging markets suffering a weak end to 2018 leading analysts to predict a tough year ahead for some of the region’s major exporting hubs.
Manufacturing data for December disappointed in Malaysia, Myanmar, Taiwan and Thailand in the final month of 2018, suggesting weak production across the board over the fourth quarter.
South Korea’s purchasing managers’ index (PMI) improved slightly on a dismal performance in November, but still languished at 49.8 – with anything below 50 for the a gauge of manufacturing performance considered as a contraction.
Furthermore, Korean exports contracted by 0.8 per cent year-on-year in December.
Korean data is considered a good barometer for regional trade, which suggests exports across Asia’s economies will also have suffered a poor end to the year.
Significantly, Korea’s exports to China fell by 13.9 per cent year-on-year, with sales of semiconductor to China, among the nation’s most important and valuable exports, falling by 8.3 per cent.