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在线翻译:
szdaily -> World Economy -> 
Asia’s exports show signs of weakness
    2018-05-03  08:53    Shenzhen Daily

MANUFACTURING activity remained relatively solid in major Asian economies such as China and Japan in April, but exports showed signs of weakness across the region, a worrying development given heightened Sino-U.S. trade tensions.

High-level U.S. and Chinese officials will meet in China this week, with trade expected to be top of the agenda as both sides have threatened reciprocal tariffs on hundreds of billions of dollars worth of imports.

The meetings’ outcome could be crucial for the outlook for Asian exporters as Purchasing Managers Index (PMI) surveys of factory activity are already pointing to a slowdown.

“What we’re seeing is a cyclical soft patch in exports after a very strong rise last year,” said Dong Chen, senior Asia economist at Pictet Wealth Management.

“Without considering the potential trade war, we’re not very worried about it, we think it’s fairly normal. But if we think about the trade war ... then the outlook is quite uncertain. It could potentially bring more damage going forward.”

Tensions between the United States and China escalated earlier this year, when U.S. President Donald Trump threatened tariffs on Chinese goods worth up to US$150 billion.

China has threatened equal retaliation, including tariffs on U.S. soybeans and aircraft.

A Trump administration delegation including Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and advisers Peter Navarro and Larry Kudlow is heading to China for talks.

Ross said Tuesday Trump was prepared to levy tariffs if the delegation did not reach a settlement to reduce trade imbalances. Lighthizer said he was not looking to negotiate changes to China’s economic system, but would seek to expose it to more foreign competition.

“The agreement to talk, even if not yet to begin formal negotiations, is ... a step in the right direction, albeit one that brings a risk of negative market reaction when followed by inevitable disappointment as talks enter a more protracted phase,” said Jon Harrison, managing director for emerging markets macro strategy at TS Lombard.

The momentum in global trade, which has been responsible for much of the world’s growth in the past year or two, may be already weakening, as firms that are part of supply chains that could be hit by tariffs may be ordering fewer components for products they sell overseas, some analysts say.

China’s Caixin/Markit PMI climbed to 51.1 in April from a four-month low of 51 in March, and topped economists’ forecast for a modest slowdown to 50.9.

The survey’s findings suggested continued strength in the domestic economy, where consumption was a major growth driver in the first quarter.

But a sub-index on export orders shrank for the first time since November 2016. An official PMI survey Monday also showed external orders slowed last month. Japan saw a similar trend. The Markit/Nikkei PMI rose to 53.8 in April versus a flash reading of 53.3 and a final 53.1 in the previous month. But growth in export orders slowed sharply to only marginal levels due to a stronger yen.

Factory activity in South Korea contracted for a second month in April, with both domestic and export orders shrinking. Some firms said they had scaled back production due to weaker global demand, particularly for electronics and autos.

Data yesterday showed South Korean exports declined in April for the first time in 18 months.

Business growth in the United States and Europe, while still strong, has slowed to more modest levels with U.S. manufacturers complaining about rising commodity prices in anticipation of trade tariffs.

On the positive side, domestic orders remained strong and a long spell of sharply higher input prices appears to be levelling off.

This suggests many Asian central banks can leave interest rates low to keep supporting their economies, analysts said.

“The big picture is that inflation in most countries in the region is set to stay benign, giving their central banks scope to keep monetary policy accommodative to support growth,” said Krystal Tan, Asia economist at Capital Economics.

(SD-Agencies)

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