China’s economic slowdown casts shadow over Southeast Asia as US steps up engagement
- China’s economic growth is facing headwinds that threaten to weigh on trade with the Association of Southeast Asian Nations (Asean)
- China and the US are both stepping up engagement with Southeast Asia, though analysts are sceptical Asean states will take sides
Southeast Asian nations are in store for a tougher trade environment as China’s economic growth slows due to hardline coronavirus controls, experts say, while US attempts to boost engagement with the region are unlikely to offset falling demand.
China’s economy is facing a number of headwinds – from new outbreaks to a downturn in the vast property sector – that threaten the government’s annual growth target of “around 5.5 per cent”.
Already, multinational banks including Goldman Sachs, Citi, JP Morgan and Morgan Stanley have cut their growth forecasts for the world’s No 2 economy to between 4 and 4.3 per cent, citing zero Covid.
For economies in the Association of Southeast Asian Nations (Asean), China’s slowdown could spell trouble.
China’s growth slowdown is having different impacts on different parts of Asean
China has been Asean’s largest trading partner since 2009 and accounted for 18 per cent of the total value of goods traded by the bloc in 2019, according to the Asean Secretariat. Asean is also China’s largest trading partner.