ASEAN exports should benefit from China's economic recovery, with Malaysia seeming most poised to gain, OCBC Bank economist Wellian Wiranto said in a July 16 report.
China's second quarter gross domestic product was up 3.2 per cent year on year, higher than the estimated 2.4 per cent and recovering significantly from Q1's -6.8 per cent figure.
"The fact that China commands a lion’s share of Asean exports would thus takes on extra importance now," said the report. Based on 2019 export data, China is the destination for 18.8 per cent of Asean's exports.
While that dependence has been a painful liability for Asean in Q1, China's Q2 upturn has turned this into an asset.
Within Asean, Malaysia appears most poised to take advantage of this pick-up, as China is the destination for 21.8 per cent of its exports. Close behind at the Philippines and Vietnam, which ship 21.5 per cent and 20.5 per cent of their exports to China respectively.
China is also the top destination by export value for Indonesia and Singapore, which ship 16.9 per cent and 15 per cent of their exports there respectively.
"This is not to say that counting on China alone would save the day for Asian exporters," cautioned Mr Wiranto. "For one, some of the shipments to China are ultimately geared towards end-demand elsewhere too."
Still, given that other major Asean export destinations such as the United States may see tougher times ahead as the Covid-19 pandemic continues, "China’s recovery – however full of caveats it may be – would make that bit of difference here", he concluded.