Can Asean ride on China’s second-quarter economic rebound?

The world’s second-largest economy expanded 3.2 per cent, which analysts say is a sign of hope for Southeast Asian nations relying on it for growth

But while some say this could help cushion the impact of the Covid-19 pandemic, others have adopted a more cautious tone

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Cars at a logistics base in the Tangshan seaport economic development zone, in China’s Hebei province. Photo: Xinhua

Published: 9:30pm, 16 Jul 2020Updated: 10:04pm, 16 Jul 2020

China on Thursday surprised the world with a second-quarter economic rebound, dodging a recession and outperforming economists’ expectations. This is a sign of hope not only for the world’s second-largest economy, analysts say, but for Southeast Asian nations that rely heavily on China for growth.

The 3.2 per cent expansion it reported beat analysts’ median forecast of 2.4 per cent, and saw China recover from a 6.8 per cent dip in the first three months of the year – the first contraction since the end of the Cultural Revolution in 1976.

The results point to China as the first major economy to show recovery from the damage caused by the Covid-19 pandemic, while the United States, Japan and European nations are still struggling to reopen their economies.

Singapore’s economy shrinks by over 40 per cent in Q2, entering recession

Wellian Wiranto, an economist at OCBC Bank, said the upside surprise would rekindle hopes that the Chinese economy could help pull other others along.

“The fact that China commands a lion’s share of Asean exports would thus take on extra importance now,” he said, referring to the 10-member Association of Southeast Asian Nations. “The more recent upturn as evidenced by the second-quarter GDP print has now turned shipping most of your stuff to China [into] a key asset.”

Most Asean member states count China as their largest or second-largest export partner, and they are poised to inherit the advantages of its growth, Wiranto said. According to figures from Maybank, China accounted for 17.3 per cent of Singapore’s total exports last year, with Indonesia (16.6 per cent), Vietnam (15.7 per cent) and Malaysia (14.2 per cent) following closely behind.

China’s economy recovered from a 6.8 per cent dip in the first three months of the year, the first contraction since the end of the cultural revolution in 1976. Photo: Reuters

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