In a recent research report Moody’s identifies which Asian countries are most vulnerable to slower global trade volumes and which stand to gain.
— Hong Kong, Singapore, Taiwan, Vietnam and Mongolia are among the most exposed in Asia Pacific to a sustained trade slowdown in China.
— But Taiwan and Vietnam also stand to benefit the most, along with Thailand and Malaysia, from trade and investment diversion away from China.
Asia Pacific: Spillovers From Slowing Trade Weigh On Growth
Moody’s Investors Service has examined 23 rated countries in Asia Pacific and identified in a just-released report, countries that benefit the most and those which are the most vulnerable to falling trade volumes globally, in part because of the ongoing and broad-based tensions between the US (Aaa stable) and China (A1 stable).
“Given the uncertain outlook for growth and trade policy, as well as generally tighter financing conditions, slower investment growth will amplify the trade slowdown, especially in Hong Kong, Singapore, Taiwan, Vietnam and Mongolia,”Christian de Guzman, a Moody’s Vice President and Senior Credit Officer.
Shifts In Production Chains Positive For A Few Sovereigns Over Time
Unsurprisingly, countries that already participate in the regional manufacturing supply chain have the greatest export similarity to China, notably Vietnam, Korea, Thailand, Taiwan, Japan (A1 stable) and Malaysia. While among the most susceptible to the direct impact of slower trade flows as described above, these countries are at the same time best positioned to benefit from positive spillovers.
“And, gains from trade and investment diversion away from China will depend on industrial structure, scalability and labor costs — potentially benefiting Taiwan, Thailand, Malaysia and Vietnam — although the reconfiguration of supply chains will occur only over time,”Christian de Guzman
Higher public spending can mitigate flagging external demand, especially in Singapore (Aaa stable), Korea (Aa2 stable) and Taiwan (Aa3 stable), because these countries’ strong fiscal positions provide scope for potentially greater support.
Countries such as Bangladesh (Ba3 stable) are also less vulnerable to a softening in Chinese demand because of their reliance on trade outside of Asia Pacific.
Thai Baht currency control mulled by central bank
The Industry Minister proposed measures to help business owners, such as the promotion of Thai Baht as a currency for international trade to reduce the risks from US Dollar currency fluctuation
BANGKOK, 15th August 2019 (NNT) – The Minister of Industry has held talks with the Bank of Thailand’s Governor over measures to control the fluctuation of Thai Baht currency, minimize impacts faced by SMEs and promote the import of machinery during this time to take advantage of the stronger currency.(more…)
Thailand’s dangerous debt addiction
Thailand is now a top-ten highest household debt country among 89 countries worldwide and third highest among 29 Asian countries.
Thailand’s household debt has steadily increased to 78.6% of the country’s gross domestic products (GDP), or Bt12.8 trillion in the fourth quarter of last year, according to figures from the National Economic and Social Development Council.(more…)
Thailand’s four challenges : Debt, inequality, plastics and climate change
Thais tended to get into debt faster, for longer and for higher amounts. Indebtedness starts as soon as they begin to work at age 25 and can increase until 56 years old.
Bank of Thailand Governor Veerathai Santiprabhob, in his speech entitled “Formulating for the Future of Corporate Governance”, delivered at the Finance and Beyond National Director Conference 2019 in Bangkok (July 24th), said Thailand faces four challenges that require good governance in businesses to address.(more…)
Thailand Ecommerce Market: Shooting For Success
At present, the Thai ecommerce market is valued at USD 3.5 billion. According to a Google Temasek study, Thailand’s e-commerce...
Aspire Set to Become First SME Neobank in Southeast Asia with US$32.5 Million Raise
The recent financing has been led by Mass-Mutual Ventures Southeast Asia with participation from Silicon Valley’s Arc Labs and existing...
How is Thailand Bringing Technology to the Table?
In Asia, a country like Thailand has taken the initiative to implement agricultural biotechnology in its industry. The country has...