Singapore's shipment to China dropped for the first time in eight months on a year on year basis this November. The decrease in Singapore's export followed the predictions of the economists that the U.S.-China trade war will impact demand from China.
China is Singapore's biggest import partner. Economists predicted that economists dependent on China's trade will be affected by the trade war. According to the data released by the trade agency Enterprise Singapore, Singapore's non-oil domestic exports dropped by 2.6 percent in November on a year on year basis. It is contrary to Reuters' poll that it will increase by 1.2 percent.
Shipments to China contracted after the fear of the impact of the trade tensions increased.
It significantly dropped from its 8.2 percent rise the month before and it was the first decrease since March. Sian Fenner, an economist at Oxford Economics, said in a search note to clients that while domestic exports to the U.S. remained healthy and shipments to China continued to weigh on overall growth. He added that, notwithstanding the recent truce in the U.S.-China trade war, they think that weaker Chinese import demand will increasingly weigh on exports and Singapore's gross domestic product growth over 2019 amid increased trade protectionism.
According to report, trade to China dropped consecutively for four months in November. It dropped by 16 percent when compared to last year during the same period. According to Song Seng Wun, China's growth has moderated and it is because of the declining exports to China. he added that if you look at retail sales, it is quite indicative that Chinese macro fundamentals have weakened.
China's retail sales in November are at its weakest growth rate since 2003. Its industrial output is at its frailest following the economy's losing momentum. According to reports, Singapore's top trading partners including China, Indonesia, and Europe dropped.
Singapore's electronic exports are gaining by 4.5 percent in November. It recovered from a 3.6 percent decrease in October. There is growth by about 27.9 percent in ICs export. The country's consumer electronic exports increased by 11.5 percent. Telecommunications equipment export also increased by 3.4 percent.
United Overseas Bank (UOB) expects that the positive trend on electronics export will last because of high base effects from 2017 and the decelerating global tech cycle. It added that they will continue to be concerned about the US-China trade development which clouds the outlook for a very trade-dependent Singapore.
