Asia’s tumbling exports signal growing global trade pain
SEOUL: Key Asian exporters Singapore, Japan and South Korea provided fresh evidence this week that the slump in global trade has further to run and is beginning to spread to factories.
South Korea’s exports tumbled by 12 per cent in the first 20 days of this month, data released yesterday showed. A day earlier Japan reported that exports fell 8.4 per cent last month from a year earlier, the first back-toback fall since 2016.
Singapore started the week by reporting exports fell the most in more than two years last month.
“We’re looking at a decidedly ugly first-quarter external demand picture for the region and that is especially bad news for export-dependent countries in Asia,” said Trinh Nguyen, senior economist at Natixis Asia Ltd.
One common denominator: falling shipments to China as that nation’s cooling economy, the United States-China trade war, and a slowing of the global technology cycle all take a toll on key Asian economies.
Japan’s exports to China dropped 17 per cent last month, while South Korea’s fell 14 per cent in the first 20 days of this month. Shipments to China were likely distorted somewhat by the Lunar New Year holiday, but the slumps are in line with the longerterm trend.
Economists already had been eyeing the end of “front-loading” — businesses boosting orders ahead of threatened higher tariffs. And broader signs of a global growth slowdown, including at factories and in overall growth figures, corroborate the weakness in exports.
The slowing of trade was hurting Japan’s factory sector, with manufacturing activity contracting this month for the first time in two and a half years, according to preliminary data released yesterday. Net exports were already a drag on gross domestic product growth during the fourth quarter, according to data released last week.