Three key idiosyncrasies in Asian trade and why they matter

Idiosyncrasies in recent Asian trade data suggest that country-specific factors are becoming more influential and causing some countries’ exports to buck cyclical trends. If that continues, the fortunes of regional exporters will diverge further in 2024, though we still think the overall export trend will be subdued. The economic importance of export sectors in Asia means currencies, asset prices and policy could diverge accordingly. Download the report now.

What you will learn:

• The first idiosyncrasy is that automotive exports are racing ahead. That is benefitting China, South Korea, Japan, and Thailand. Some of the boost reflects pandemic-era order backlogs still being filled, which should soon fade.
• Second, Vietnamese trade is on a roll. Despite the general downtrend in electronics, Vietnam’s six-month winning streak is being driven by exports of electronics, especially to China.
• Third, while on aggregate Asian exports to China are still doing worse than exports to other countries, some countries’ exports to China are outperforming. That likely reflects the lengthening of supply chains in response to trade friction, with Asian countries “interposing” between China and the US.
• As that continues, more opportunities will be created for some exporters. Aside from Vietnam, the rest of ASEAN looks best placed to benefit.