Investment growth across Asia-Pacific's trade-dependent countries has declined to a seven-year low amid escalating trade tensions, S&P Global Ratings said.
S&P Global Ratings said that weak investment could weigh on demand in the short run and adversely impact supply in the long run, even though some countries benefit as investment and trade are diverted from China.
The rating agency noted a limited impact of the recent tariff increases on growth in China and across the Asia-Pacific region, adding that policy easing could offset such effects. However, it noted weaker investment as an indicator of trade tensions having a much broader indirect impact.
Investment growth in Chinese technology-related manufacturing is at its lowest level since at least 2004. Long-term growth prospects for China will deteriorate if investment and trade protectionism weigh on technology transfers to China, according to the rating agency.