A sustained China trade slowdown would be likely to have the greatest impact on Hong Kong, Singapore, Taiwan, Vietnam and Mongolia in the Asia-Pacific region, according to a report from Moody's.
Recent data showed China's foreign trade surplus declined 84% year over year in February, to 34.46 billion yuan. The country is negotiating a deal with the U.S. to end the ongoing trade rift between the two economic powerhouses.
Uncertainty surrounding economic growth and trade policy in Hong Kong, Singapore, Taiwan, Vietnam and Mongolia, as well as tighter financing conditions, would amplify the impact a continued slowdown in China may have on these countries, said Christian de Guzman, a vice president and senior credit officer at Moody's.
Higher public spending may temper the impact of China's slowdown on Singapore, Korea and Taiwan due to their fiscal strength, while other countries, like Bangladesh, may see less fluctuation due to their reliance on trade outside Asia-Pacific.
Taiwan is likely to benefit from trade and investments diverted away from China, along with Thailand, Malaysia and Vietnam, depending on its industrial structure, scalability and labor costs, de Guzman added.
As of March 18, US$1 was equivalent to 6.71 Chinese yuan.