There are signs that Asia’s export slump is bottoming out.
That is according to Goldman Sachs Group Inc economists who highlighted a substantial pickup in exports to the US from Asian economies, including Taiwan, Vietnam and India, that is effectively canceling out the fall in shipments from China.
“Initial shocks from the trade war might be behind us, with Asian exports to China recovering and tech exports catching up with stable non-tech exports,” Goldman economists led by Andrew Tilton wrote in a note.
“Also, a rebound in the Asian trade cycle seems overdue, with Asian exports undershooting trade partners’ activity growth and the current downturn being sustained longer than past cycles,” they wrote.
Chinese and US trade negotiators meet again in Shanghai this week for the first round of meetings between both sides since talks broke down in May.
Even if trade tensions escalate, an expected wave of supportive measures from governments and central banks to underpin economic growth would aid the trade recovery, Goldman said.
The US Federal Reserve is tipped to cut interest rates this week for the first time in a decade.
For sure, additional US tariffs on Chinese goods would have an impact.
“Our view is, however, that the escalation would likely be temporary ahead of an eventual trade agreement, and potential damages could be mitigated by ongoing shifts in supply chains,” the economists wrote.
“In the event of further escalation in the trade tensions beyond our baseline, Asian trade may undergo another downturn which, if sustained for the coming year, could make the current downcycle the longest since the 1990s,” they added.
Separately, China’s economy continued to weaken this month, bolstering the case for greater policy support to shore up growth as talks over the trade dispute with the US continue.
The slowdown is seen in a Bloomberg Economics gauge aggregating the earliest available indicators on market sentiment and business conditions.
“Trade disputes are still a key risk to both Chinese and other major economies,” David Qu (曲天石) from Bloomberg Economics said. “Producer prices are under pressure, as material prices may be influenced by the concerns about trade, and as we see in the PMI surveys, domestic confidence is still subdued.”
The official purchasing managers’ surveys for this month are due for release tomorrow.
The outlook for export-oriented small businesses eased this month, and an index gauging conditions for small companies slowed to the weakest in more than three years, with overall demand subdued and investment appetite down, according to economists from Standard Chartered PLC.
“We expect exporters to remain cautious on production and investment prospects, given weakening external demand on sluggish global growth and the protracted trade friction with the US,” Standard Chartered economists Shen Lan (沈蘭) and Ding Shuang (丁爽) wrote in a note.
Outbound shipments from South Korea also suggested weaker demand from overseas. Its exports fell 13.6 percent in the first 20 days of this month from a year earlier, indicating shrinking demand for components from Chinese assemblers of electronics such as iPhones.
Conditions reported by sales managers also weakened in the month due to low business confidence, especially in manufacturing, according to London-based World Economics Ltd.
Anna Bhobho, a 31-year-old housewife from rural Zimbabwe, was once a silent observer in her home, excluded from financial and family decisionmaking in the deeply patriarchal society. Today, she is a driver of change in her village, thanks to an electric tricycle she owns. In many parts of rural sub-Saharan Africa, women have long been excluded from mainstream economic activities such as operating public transportation. However, three-wheelers powered by green energy are reversing that trend, offering financial opportunities and a newfound sense of importance. “My husband now looks up to me to take care of a large chunk of expenses,
SECTOR LEADER: TSMC can increase capacity by as much as 20 percent or more in the advanced node part of the foundry market by 2030, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to lead its peers in the advanced 2-nanometer process technology, despite competition from Samsung Electronics Co and Intel Corp, TrendForce Corp analyst Joanne Chiao (喬安) said. TSMC’s sophisticated products and its large production scale are expected to allow the company to continue dominating the global 2-nanometer process market this year, Chiao said. The world’s largest contract chipmaker is scheduled to begin mass production of chips made on the 2-nanometer process in its Hsinchu fab in the second half of this year. It would also hold a ceremony on Monday next week to
TECH CLUSTER: The US company’s new office is in the Shalun Smart Green Energy Science City, a new AI industry base and cybersecurity hub in southern Taiwan US chip designer Advanced Micro Devices Inc (AMD) yesterday launched an office in Tainan’s Gueiren District (歸仁), marking a significant milestone in the development of southern Taiwan’s artificial intelligence (AI) industry, the Tainan City Government said in a statement. AMD Taiwan general manager Vincent Chern (陳民皓) presided over the opening ceremony for the company’s new office at the Shalun Smart Green Energy Science City (沙崙智慧綠能科學城), a new AI industry base and cybersecurity hub in southern Taiwan. Facilities in the new office include an information processing center, and a research and development (R&D) center, the Tainan Economic Development Bureau said. The Ministry
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
RSS