CHINA’S recent deflation print could pose fresh headwinds for its trading partners in South-east Asia, already exposed to potential economic fallout from a slowdown in the world’s second-largest economy.

“Falling domestic prices, as well as a weak yuan, mean that Chinese households are therefore likely to prioritise domestic goods and services over imports in general, including those from Asean,” Moody’s Analytics economist Denise Cheok told The Business Times.

“Exports of most goods from Asean to China have generally been down across the board,” she added, naming electronics as a key South-east Asian export that has been hit hard.