Trade War Hurting Far East Markets

The US/China trade war is starting to ‘show its teeth’ as trade figures coming out of the Far East are now proving.

Singapore has long been a benchmark for how the region is performing given that it is a financial hub with its business being import/export of trade between the East and the West.  According to the BBC, figures released last week reported a 17.3% drop in June, that is a 3.4% decline in growth compared to the last quarter.  This is the second month in a row that activity is falling and at nearly 20% this is not to be ignored.

Other countries in the area had major falls in export trade with India’s exports down by 9.7%, Indonesia down 8.98% and South Korea falling by 13.5%.

Singapore is one of the world’s biggest trade-dependent economy.  The decline in growth is worrying Asian watchers as it will have a knock-on effect for the rest of the region.

Comment

Emerging markets and Far East growth depends upon China producing and Europe and the US consuming.  The US/China trade war is now starting to bite across the Far East hence investment markets remain suppressed and why we are continuing to drip feed every month into these markets i.e. investing at lower, better value prices than say US where the Dow Jones hit a year high last week. 

Long term, we have a view that the natural wealth of the planet that flowed out of the Far East in the 18^th and 19^th centuries to the West is now flowing back to the East.  Even Donald Trump is now levelling his sights at Vietnam for tariffs.  Expect more protectionism as the West succumbs to the East for global economic dominance.