US and China trade war to further slow Asia’s trade growth: ADB Report

According to the report, China's imports from the US declined 31.0% (year-on-year) in the second half of 2018, particularly among the sectors affected by the tariff hikes such as soybeans and other agricultural products. Besides, the US imports from the China also fell 12.6% for the first 8 months of 2019.

Asian Development Bank (ADB) has expressed concerns on ongoing trade tensions between China and USA and has cautioned about further deterioration in the Asia’s trade growth in the current financial year.  

“In 2018, Asia’s trade (by volume) grew by 4.0%, slower than the 7.3% growth in 2017. This came in tandem with the slowdown in global trade growth from 4.6% to 3.0%. Continued trade tensions and a weakening of global demand pose key downside risks to the region’s trade and growth outlook,” said the report titled Asian Economic Integration Report 2019-20. The report is based on the data of 49 member countries of ADB in the Asia Pacific region.  “Ongoing trade frictions between the United States (US) and the People’s Republic of China (PRC) since early 2018 are affecting global and regional trade growth. PRC imports from the US declined 31.0% (year-on-year) in the second half of 2018, particularly among the sectors affected by the tariff hikes such as soybeans and other agricultural products. US imports from the PRC fell 12.6% for the first 8 months of 2019. Persistent trade tensions could dampen business confidence and weaken investments globally, casting a shadow over global economic prospects,” added the report.

Though trade war between two super powers – China and USA – is an ongoing phenomenon but it intensified in 2018 when the President Donald Trump started putting restrictions on China and Chania based companies for what he termed ‘unfair trade practices’. The Trump administration alleged that Chinese companies were engaged in forced transfer of intellectual property to China, theft of intellectual property and causing trade deficit. This trade war between both the countries soon took up the form of tit-for-tat which has a cascading effect on almost all the economies of the world. With ADB Report indicating towards lower growth rate due to tension between both the economies, there seems no immediate respite in the Asian region.

However, the report also has a silver lining of record growth rate in the tourism among ADB member countries. “Tourist arrivals in Asia grew faster than anywhere else in the world with international tourism receipts hitting a record $368 billion in 2017,” concluded the report. According to the report the inbound tourists from both Asia and Non-Asia contributed to the high growth in Asian countries. Asia attracted 23.4% (310.7 million tourists) of global tourist arrivals in 2017, up from 20.5% (195.4 million) in 2010. “Intraregional tourists accounted for nearly 80% of tourists to Asia. The largest number of tourists came from Hong Kong, Taipei and the People’s Republic of China (PRC),” said the report.