{"id":44164,"date":"2020-10-26T03:23:24","date_gmt":"2020-10-26T03:23:24","guid":{"rendered":"https:\/\/qatar-news.org\/qatarnewsEn\/?p=44164"},"modified":"2020-10-26T03:23:24","modified_gmt":"2020-10-26T03:23:24","slug":"is-chinas-recovery-helping-asias-other-big-exporting-economies","status":"publish","type":"post","link":"https:\/\/qatar-news.org\/qatarnewsEn\/?p=44164","title":{"rendered":"Is China\u2019s recovery helping Asia\u2019s other big exporting economies?"},"content":{"rendered":"
\n

South Korea, Taiwan and Hong Kong all consider mainland China to be their biggest export market, but the jury is out on how strongly they are feeling the effects of a robust Chinese economic rebound.<\/p>\n

The three Asian powerhouses, along with most other economies, have all shrunk this year due to shutdowns to contain the spread of the novel coronavirus.<\/p>\n

They will report third-quarter economic data over the coming days.<\/p>\n

A surge in demand by China for computer chips ahead of US curbs on technology exports likely worked in South Korea and Taiwan\u2019s favour. But Hong Kong\u2019s political troubles and the fact that it has become ensnared in the US-China dispute are likely to keep it in recession, analysts say.<\/p>\n

\u201cAccelerated export recovery should bode well for the [gross domestic product] numbers\u201d for the three economies, Prakash Sakpal, senior Asia economist at Dutch bank ING said in a research note sent to Al Jazeera.<\/p>\n

\u201cWe expect export strength to outweigh domestic demand weakness producing a strong GDP bounce over [the second quarter],\u201d Sakpal added.<\/p>\n

But South Korea and Hong Kong suffered a jump in virus cases during the third quarter, likely putting a damper on their recovery.<\/p>\n

Hong Kong\u2019s pain<\/h2>\n

China\u2019s economy expanded<\/a> by 4.9 percent in the July-September quarter from a year earlier, as consumers returned to shops and restaurants, accelerating its rebound from COVID-19 lockdowns at the start of the year.<\/p>\n

Its recovery is providing a much-needed source of demand, not just for other parts of Asia, but for the rest of the world, where coronavirus cases are on the rise again.<\/p>\n

Among the three territories reporting gross domestic product (GDP) data through to the end of the month, Hong Kong, a self-governing Chinese territory, is the most dependent on the mainland for its exports. Last year, it sent 43 percent of its total exports to mainland China.<\/p>\n


Pro-democracy protests in Hong Kong have been a source of economic uncertainty for more than a year [File: Tyrone Siu\/Reuters]<\/figure>\n

Despite that, ING expects Hong Kong to report a 10 percent contraction in its GDP \u2013 the sum of a country\u2019s goods and services produced over a given period, and the most commonly used indicator of economic growth \u2013 between July and September compared with the same period last year.<\/p>\n

That would be an even sharper contraction than the 9 percent shrinkage in the second quarter and the record 9.1 percent plunge in the first.<\/p>\n

A combination of political unrest surrounding Beijing\u2019s imposition of a national security law on the territory, the fallout of tensions between China and the US, and the coronavirus have slammed Hong Kong\u2019s economy.<\/p>\n

Hong Kong will report its data on October 30, the same day as Taiwan.<\/p>\n

Resilient Taiwan<\/h2>\n

ING also expects a deterioration in Taiwan\u2019s economy in the third quarter, with a 1 percent year-on-year contraction compared with a 0.58 percent shrinkage in the preceding three months.<\/p>\n

But that is a relatively shallow downturn compared with the other two territories. Taiwan has been credited with an aggressive and early response to the outbreak in neighbouring mainland China, which considers Taiwan a part of its own territory.<\/p>\n

Taiwan\u2019s world-class computer chip industry may have also helped cushion the blow of the downturn.<\/p>\n

Taiwan Semiconductor Manufacturing Co (TSMC) is one of the world\u2019s top chipmakers [File: Tyrone Siu\/Reuters]<\/figure>\n

\u201cTaiwanese, Korean and Japanese exporters saw shipments of electronic components soar ahead of the 14 September US ban on China\u2019s Huawei Technologies Co\u2019s sourcing of semiconductors from international and US overseas entities using US technology,\u201d Sharmila Whelan, deputy chief economist at Aletheia Capital said in a research note distributed on the Smartkarma platform.<\/p>\n

In August, Taiwanese exports to China rose by 18 percent compared with July, led by a 14 percent rise in electronic components, Whelan wrote.<\/p>\n

According to the Bloomberg news agency, Huawei<\/a>, one of the biggest suppliers of cutting edge 5G mobile network equipment, spent months building its stockpile of critical radio chips ahead of sanctions by US President Donald Trump\u2019s administration.<\/p>\n

Its partner, Taiwan Semiconductor Manufacturing Co, began ramping up output in late 2019 of the crucial chips, eventually shipping more than two million units, Bloomberg quoted unidentified sources as saying.<\/p>\n

South Korea\u2019s soft landing<\/h2>\n

South Korean shipments to China rose by 21 percent and semiconductor exports by 27 percent in the first 20 days of September, Aletheia\u2019s Whelan said.<\/p>\n

South Korea is expected to report on Tuesday that its economy shrank by 1.9 percent, according to a survey of economists published by data provider Refinitiv.<\/p>\n

Shoppers in Seoul\u2019s stylish Gangnam area [File: Kim Hong-Ji\/Reuters]<\/figure>\n

That is an improvement on the previous quarter, which saw South Korea\u2019s GDP shrink by 2.7 percent year-on-year.<\/p>\n

But not everyone is convinced China\u2019s rapid turnaround from its own coronavirus-driven plunge in the first quarter is giving the world a sizeable economic boost.<\/p>\n

\u201cThe contribution of mainland China to world GDP growth this year is roughly the same as during the [2008-2009 Global Financial Crisis] \u2013 very helpful, but hardly a panacea for the global economic malaise,\u201d Frederic Neumann, co-head of Asian Economic Research at HSBC said in a research note sent to Al Jazeera.<\/p>\n

Neumann says China\u2019s economic stimulus measures \u201cfall well short\u201d of those it delivered during the previous episode.<\/p>\n

\u201cAs important as reviving demand in mainland China is for many companies elsewhere (think car makers, for example, or commodity producers), China is still less import-reliant than many other markets. Put simply: China may be holding up global GDP, arithmetically at least, but that\u2019s not translating into as large a global growth impulse as if, say, Europe was firing back up.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

South Korea, Taiwan and Hong Kong all consider mainland China to be their biggest export market, but the jury is out on how strongly they are feeling the effects of a robust Chinese economic rebound. The three Asian powerhouses, along with most other economies, have all shrunk this year due to shutdowns to contain the…<\/p>\n","protected":false},"author":10,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-44164","post","type-post","status-publish","format-standard","hentry","category-spotlight_news"],"_links":{"self":[{"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/posts\/44164","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=44164"}],"version-history":[{"count":0,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/posts\/44164\/revisions"}],"wp:attachment":[{"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=44164"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=44164"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=44164"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}