Asia’s Ugly Exports Are About to Look Even More Hideous
In Asia, one surprise increase in export growth is what passes for relatively good trade news these days.
(Bloomberg) --
In Asia, one surprise increase in export growth is what passes for relatively good trade news these days.
Thailand’s exports unexpectedly rose, jumping 4.3% in July from a year earlier. But that’s cold comfort for the continent’s powerhouses that now have to fight unfavorable base effects on top of all the other global trade pressures: muddled messages on U.S.-China talks, Japan-South Korea tensions, and a brewing drama between the U.S. and Europe, to name just a few.
Taiwan and South Korea already had set the darker tone for the week, with contractions in export orders for Taiwan in a report Tuesday, and figures Wednesday showing South Korea’s latest first-20-days gauge shrinking, too. For almost every month this year, the two economies have shared full-month export contractions.
Looking ahead, it’s all about that base effect. The year-earlier export comparisons for all three economies are set to look even uglier in the months ahead. Thailand’s August 2018 exports level was its highest in records back to 1991. September for South Korea was the best first-20-days performance since at least late-2003, and Taiwan’s export orders for October 2018 shattered every record dating to 1984.
The Taiwan and South Korea news followed numbers Monday showing Japan’s merchandise exports dropped for an eighth straight month. It all fits into the drumbeat of gloom illustrated by Bloomberg’s Trade Tracker, which now has four of 10 gauges in below-normal territory.
Here’s why it matters for everyone. Emerging Asia’s high-growth, trade-heavy economies are critical to keeping the world economy from stumbling. So the whimpers from a dynamic region like Asia are ominous for global growth. The developed engines of Europe and U.S. — with their aging populations, crumbling infrastructure and elevated debt — won’t be the locomotives forever.
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To contact the editor responsible for this story: Brendan Murray at brmurray@bloomberg.net, Zoe Schneeweiss
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