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Visitors look at the city horizon from the Kuala Park on September 30, 2021.
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The developing markets were between the rock and the heavy place against the background of the escalation trading war, it would be forced to choose between China and the US, but there is another way: they support themselves.
“The countries of Southeast Asia, including Malaysia, must negotiate with the US to come up with a soft place,” said CNBC, a former Deputy Minister of International Trade and Industry in Malaysia. “But at the same time, it does not prevent us from working with other countries – not to twist the United States, but to benefit itself.”
South -Eastern Asia is particularly vulnerable to the escalation of the global trade war. Goldman Sachs reduced its growth forecasts in the developing Asian markets, saying that smaller export-oriented economies are most subjected to tariff shock.
GDP forecast in GDP in 2025 for Vietnam is now 5.3% – much lower than a 6.5% consensus estimate, quoted by Goldman. The bank expects that Malaysia will grow by 3.8% (compared to 4.7%) next year, and Thailand will increase by 1.5% (compared to 2.7%).
Nations Southeast Asia were among The most severe blow About the self -proclaimed “Liberation Day of US President Donald Trump”. They must be reached by the tariffs up to 49% after 90-day temporary reduction up to 10% for all countries (Bar China) is raised.
This means that the region is faced with complex balance, as the US is not the only strategic cuts also plays a crucial role for medium-term growth and development goals for many developing Asian economies, according to Venkoteswaran, Senior economist ASEAN at the OCBC Bank.
Chinese President Xi Jinping visited Vietnam, Malaysia and Cambodia earlier this month Seeking Beijing’s promotion as a pillar of stability and increasing ties in the region. He also called on the World South to “support the common interests of developing countries.”
And it seems that it happens.
UN Secretary -General for UN Trade and Development Rebecan Greenpo said this month CNBC Squawk Box that intra -regional trade is growing.
“One interesting indicator we have since last year, in this century, is that the southern south trade is already growing faster than trade in the northern northern,” she said. “So
Anvar Ibrahim, Prime Minister of Malaysia and the current Verzhzhny ASEAN chairman, repeated these sentiments, calling for greater trade and greater economic integration in the region in the main speech at the ASEAN investment summit in early April.
No simple solutions
According to Lavanya Venkateswaran, an economist at OCBC.
“In the near future, the authorities will have to use financial and monetary policy tools to provide counter -c it to the affected sectors of the economy. For the middle period, the authorities understand the need for diversification of trade and investment partners,” she said.
This helps that the so-called “China+1” strategy still contains in the middle run, she added. Many export-oriented Southeast Asia economics were great beneficiaries strategies during the Trump’s first administration, receiving economic incentives when companies transferred production from China to their shores.
For example, in Cambodia, according to the World Bank, the export of goods and services of Cambodia was 55.5% of its gross domestic product in 2018, before Trump imposed its first tariffs on China – by 2023 this figure increased to 66.9%.
Miguel Chanka, Asia’s Chief Economist in Pantheon Macroeconomics, agreed, Saying that these developing markets are more attractive than China as export hubs in the long run.
“It should also be borne in mind that these tariffs do nothing to eliminate the competitiveness of the cost in the EM-Hei-Chinese economy (compared to China), which will remain a big shopping point in the long run for transnational companies,” he said by e-mail CNBC. “New supply chains will not be created for the night.”
