Understandably, the trade issue is emphasised in the IMF release: “Some of the biggest downward revisions for growth are for advanced economies in Asia, including Hong Kong… Korea, and Singapore, a common factor being their exposure to slowing growth in China and spillovers from US-China trade tensions.” Indeed, real GDP growth in Singapore has fallen to zero year on year to September. In Hong Kong, real GDP barely grew in the year to June and no doubt the September numbers, when available, will show further deterioration. In South Korea, annual growth is down to 2% to September and on a declining trend. The IMF commented that “there is no room for policy mistakes and an urgent need for policymakers to cooperatively deescalate trade and geopolitical tensions.”
The damaging trade conflict between the US and China shows only limited signs of easing. Every so often, there appears some hope of rapprochement, but then the hope is ruthlessly torn away. President Trump is fond of advertising all the good his tariffs are doing – but what we see is a major slowdown in world trade volumes (from around 5% growth in 2017 to negative in the current year) plus accompanying slowdowns in industrial production and new manufacturing orders.