US demand not enough to save Q1 Asean exports

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Exports from South-east Asian markets like Singapore. shrank year on year in the first quarter, despite mild growth in shipments to the United States.
APRIL 23, 2019 - 5:22 PM

SOUTH-EAST Asian electronics factories have been hard hit by the US-China trade war, especially amid a Chinese slump, an OCBC economist has said.

That’s despite exports to the United States rising in some Asean markets over the same period.

Exports from Singapore, Malaysia, the Philippines and Indonesia contracted year on year in the first quarter while Thailand was flattish, according to data compiled by economist Howie Lee.

The electronics sector suffered more than others - led by the downturn in semiconductors, which, along with integrated circuits, make up most of the region’s electronics exports.

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Mr Lee wrote in a recent report that the US may have turned to Asean amid its trade feud with China, either from “a textbook demonstration of substitution effect”, or because the US tends to import finished products - rather than intermediate goods like semiconductors.

“China’s ability to engineer a soft landing and establish a bottom will be key in driving an uptick in exports from the Asean bloc and beyond,” he added.