China slowdown means contrasting fortunes for Asia's exporters

China’s economic growth slowdown has triggered a stark contrast in fortunes for its trading partners across Asia, with northern neighbors suffering while economies in the southeast are broadly holding up.

The world’s No. 2 economy is still dealing with a slump in consumption and output brought on by lockdowns, compounding the hit to demand from a global semiconductor slowdown.

Meanwhile, exports from most of Southeast Asia’s top six economies, each of whom counts China as its No. 1 trading partner, are more resilient as their shipments are dominated by essential goods and commodities including palm oil and refined petroleum products.

With the world facing the prospect of weaker demand due to monetary policy favoring inflation-fighting over stabilizing growth, a further slowdown by China would be cause for alarm.

From a broader standpoint, Asean export resilience in the face of a Chinese slowdown can be attributed to “pent-up demand that built up from earlier days in the pandemic,” said Tamara Henderson, Bloomberg Economics’ Asean economist. It “will fade as this source of demand becomes satiated and with China’s economy now facing more strains.”