(Bloomberg) -- The Great Asian Export Spurt may be about to end, replaced by a stretch of merely good exports.
Demand from both Chinese consumers and manufacturers, a key driver for an unexpected jump in Asian exports so far this year, is likely to moderate as Beijing shifts focus toward economic re-balancing, and corporate China slows a massive inventory buildup, Credit Suisse economists argue in a research note.
“Asian exports have been surprisingly strong this year, both in nominal and volume terms, providing significant lift to gross domestic product in most economies,” Santitarn Sathirathai and Michael Wan write. “However, we think the tailwinds to exports are fading, which will result in export growth moderating from mid-teens rate to mid-single digit for the rest of the year.”
Credit Suisse is anticipating that strong sales of Asian semiconductors, a boon for the likes of Singapore and Malaysia, will slow from the second quarter as demand from Chinese consumers moderates and because manufacturers have already accumulated enough parts.
The threat of Donald Trump slapping China with punishing tariffs adds a reason for caution over the prospects for Asian exports in the second half of the year. Such a move would also be felt by Japan, South Korea and Taiwan, vital cogs in the regional supply chain that allows China to build gadgets for the world.
But, even in the absence of U.S.-driven protectionist measures, Credit Suisse anticipates that Chinese domestic considerations point toward fewer imports from the region. The country’s GDP growth is already running close to 7 percent, and recent measures to curb speculation in the property sector indicate a shift toward containing leverage and asset prices.
An important consequence of such a shift is that China’s commodity imports, of particular relevance for the likes of Indonesia, may also suffer, Credit Suisse says.