Trade war lands Asian exports in worst condition since the global financial crisis

UN report shows that Asian exports declined this year for the first time in a decade, sparked largely by the knock on effect of US-China tariffs

China’s annual exports fell by 1.4 per cent in value terms this year, Hong Kong’s by 4.8 per cent and Singapore’s by 14.9 per cent

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ESCAP estimated that China’s annual exports fell by 1.4 per cent in value terms this year, Hong Kong’s by 4.8 per cent and Singapore’s by 14.9 per cent. All three economies are highly-connected. Photo: AFP

Published: 7:00am, 21 Dec 2019Updated: 7:35am, 21 Dec 2019

The year of pig brought the worst 12 months for Asia-Pacific trade since the global financial crisis 10 years ago, with the United Nations laying much of the blame on the US-China trade war.

In 2019, for the first time in over a decade, Asia-Pacific economies will see declining trade in goods and services by both volume and value, according to the Bangkok-based UN Economic and Social Commission for Asia and the Pacific (ESCAP).

By volume, total exports could drop by 2.5 per cent and imports dip by 3.5 per cent. Under the pressure of lower prices, values of exports and imports could fall by 3.6 per cent and 4.8 per cent respectively, ESCAP estimated.

ESCAP estimated that China’s annual exports fell by 1.4 per cent in value terms this year, Hong Kong’s by 4.8 per cent and Singapore’s exports by 14.9 per cent. All three economies are highly-connected, but the biggest drop off came in Iran, faced by heavy trade sanctions, which suffered a 32.4 per cent drop in exports and a 19.7 per cent import slump this year.

Developed countries in the region are experiencing worse trade woes than developing ones. Developing Vietnam, for example, has taken advantage of US tariffs on China, by becoming an alternative supplier of goods to the US market. As a result, ESCAP said its exports will grow 4.4 per cent this year and 5.8 per cent next year, in value terms.

Export values from four developed economies in the region, including Australia, Japan, New Zealand and South Korea, on the other hand, are estimated to decline by 6.9 per cent this year, compared to a more modest 2.6 per cent decline across developing nations.

“Looking ahead, a modest 1.5 per cent and 1.4 per cent expansion of exports and imports respectively in 2020 is on the horizon; however, this is dependent on whether the US-China interim agreement can reduce some policy uncertainty,” read the ESCAP report.