China Slowdown to Hit Brazil, Chile, Saudi and APAC: Natixis


China’s economic slowdown will be a “significant negative shock” to Latin American countries, notably Brazil and Chile, as well as African countries such as South Africa and Ethiopia, Germany, oil-producing countries and all Asia-Pacific countries except India, says French financial services firm Natixis.

“It is reasonable to expect China’s growth to slow markedly due to a number of factors that all point in the same direction – population ageing and consumer caution, weak corporate investment and now weak construction investment, high debt ratio,” Patrick Artus, chief economist of Natixis, said last week.

Artus expects the shrinking of China’s workforce to reduce China’s potential growth to 2% to 2.5%. Consumption is expected to be sluggish, companies have reduced their investment due to high debt ratios and political risks, and China’s crackdown on the property sector will weaken investment in construction, he noted.

Natixis analyzed 29 major economies across various continents and looked at their share of exports to China in GDP and the sensitivity of these exports to China’s growth.

‘Ugly numbers’: All Is Not Well With China’s Economy from AsiaFinancial on Vimeo.

Ranking by weight of exports to China, many Asia-Pacific countries and regions top the list, such as Taiwan, Singapore, Vietnam, Malaysia, South Korea, Australia, and Thailand. Chile and Brazil in Latin America, and oil-producing Saudi Arabia are also among the top ten on the list, with exports to China accounting for 7.9%, 6% and 3.3% of their GDP, respectively.

Russia’s share of exports to China of GDP is 3.3% and Germany’s is 2.8%, according to Natixis’ research.

In terms of the elasticity, or sensitivity, of exports to China to Chinese imports, Africa, Taiwan, India, Saudi Arabia, and Brazil were found to be most sensitive to China’s growth, and they are followed by South Africa, Singapore, Mexico, and Philippines.

China’s economy grew just 4.9% year-on-year in the third quarter, the weakest rate of expansion in a year, according to data released by China’s national statistics bureau Monday.

The growth was much slower than the 7.9% year-on-year increase in Q2, suggesting that China’s economy is hurting from a slew of challenges including supply chain disruptions, deepening debt woes in the property sector, and a major energy crunch.


• By Iris Hong.



China May Keep Property Curbs Amid Slowdown, Soften Tactics

Brazil criticism of Beijing may have slowed vaccine supply


Iris Hong

Iris Hong is a senior reporter for the China desk, and has special interests in fintech, e-commerce, AI, and electric vehicles. She began her career in 2006 and worked for Interfax News Agency and for PayPal before joining Asia Financial in July 2020. You can reach out to Iris on Twitter at @Iris23360981

Recent Posts

US Set to Restore China Solar Tech Tariffs After Korea Firm Plea

The solar division of Korean conglomerate Hanwha Corp, Qcells, is looking to protect a planned…

18 mins ago

Biden to Propose Tripling Tariffs on Metal Products From China

President eyes hiking tariffs amid a push for blue-collar votes on a visit to Pittsburgh,…

8 hours ago

Japanese Firms Eye Moves to the US as ‘China Illusion’ Fades

With Japanese firms now wary about investing in China, the US's economic resilience has proven…

9 hours ago

Apple Eyes Indonesia Fab as it Reduces China Reliance – AP

Apple CEO Cook also met Vietnamese Prime Minister Pham Minh Chinh in Hanoi on Tuesday as the…

10 hours ago

IMF Tips 3.2% Global Growth, Warns China on Property Crisis

IMF chief economist says China’s economy is strained by its property crisis and warns that…

10 hours ago

Nikkei Dips on Profit Taking, Hang Seng Flat Despite Rules Boost

Japan’s impending earning season saw investors rushing to cash in while Hong Kong shares were…

11 hours ago