China’s economic growth slows down, some people are happy, others are sad

China’s economic slowdown inadvertently created a mixed picture in the Asian export market. If North Asian countries share the same “deep color”, many Southeast Asian countries continue to maintain stable trade with the world’s most populous country.

Transporting containers at the Busan port terminal in Busan, South Korea.Photo: SeongJoon Cho/Bloomberg.

Currently, the Chinese economy is facing many major challenges, from the decline in consumption and output due to the Covid-19 epidemic blockade to the weakening of global semiconductor chip demand.

Against this backdrop, export activity from Southeast Asia’s top six economies, with China one of its largest trading partners, is largely showing signs of improvement. Because the main export products of the region are essential commodities such as palm oil and petrochemical products.

Tamara Henderson, ASEAN economist at Bloomberg Economics, said that ASEAN recorded positive growth in export activities as consumer demand remained anchored at a high level after a period of pent-up due to the Covid-19 pandemic. However, “this trend will gradually disappear as demand cools and the Chinese economy now faces more challenges,” he said.

On the other hand, monetary policies around the world are giving priority to fighting inflation rather than stabilizing growth, which weakens consumer demand. Therefore, China’s economic slowdown will be an ominous signal.

Exports from North Asian countries to China fell, while many Southeast Asian countries continued to maintain stable trade with the world’s second-largest economy.Photo: Bloomberg

The latest data on exports from North and Southeast Asian economies to China will further clarify this situation.

Southeast Asia

– Vietnam : After six consecutive months of decline, according to data from Bloomberg, export shipments from Vietnam to China in July increased by 6.6% over the same period last year. Vietnam’s key exports to this market include cotton yarn, phones and accessories, computers and electrical equipment.

– Indonesia : Export turnover to China in July increased by 17% over the same period in 2021, with the main products being palm oil and briquettes. Non-oil related commodities increased by 40.9% in the same period last year and decreased by only 1.27% month-on-month. Although the growth data is not stable, this is the time when the largest economy in Southeast Asia can be temporarily reassured.

– Thailand: Despite the deceleration, the value of exports from Thailand to China still maintained an upward trend. Specifically, exports of fruits and synthetic rubber increased by 25% last year to USD 37.3 billion, while in the first half of this year only increased by 0.8% to USD 18.5 billion. Data from Thailand’s Ministry of Commerce showed that, after rising 3.8% in May, exports fell slightly by 2.7% in June. Fruit and rubber exports remained up while automobiles and accessories spare parts and chemicals reduced.

– Singapore: Singapore ‘s total exports to China increased by 3.8% in July, with key products being machinery and ethylene polymers used in plastic packaging.

– Malaysia: Export shipments from Malaysia to China are still quite impressive, with the main product being refined petroleum. The growth rate was kept at double digits from December last year to May this year. After falling to just 4% year-on-year in June, shipments from Malaysia to China in July returned to an increase of 10% in ringgit and 32.6% in price terms. dollar value.

– Philippines: Contrary to the rest of Southeast Asia, exports from Manila to Beijing with key commodities such as integrated circuits, office machine components and nickel ore are continuously declining. After a double-digit decline in May, the total value of exports from the Philippines to China fell 18.8% in June and 12.8% in July. According to analysis by financial group Nomura, the decline in momentum This decline may continue as electronics account for 56% of total Philippine exports while the global technology market has been relatively bleak recently.

North Asia

– Japan: Japan’s exports to China, including electronics and semiconductor chips, are under pressure. Although, export value in July increased by 12.8% in yen terms, but decreased by 9.2% in dollar terms. The reason is because the yen is falling. Last month, the Bank of Japan said that exports to China “have fallen sharply due to the lingering effects of Shanghai and major cities under lockdown.”

– South Korea: South Korea ‘s exports to the country of billions of people with chips, screens and refined oils almost stalled in August as shipments to China fell by 11.2%. In dollar terms, the value of July exports from Seoul to Beijing fell 0.9 percent. This reflects the slow recovery of the Chinese economy in the context that Korea plays an important role in the global supply chain system.

Alicia Garcia Herrero, chief economist for Asia-Pacific at investment bank Natixis (France), said that South Korea’s export data is ominous, “especially the sharp drop in exports to China. .” “Clearly, China’s demand for imports is very low,” he said.

Source: CafeF