Singapore’s trade slump set to continue amid US-China tensions, says senior trade official

Singapore’s trade woes are likely to extend into the second half of 2019 due to the impact of US-China trade war, says the city’s permanent secretary for trade

The county’s non-oil exports, weighed down by a slump in electronics, have seen six straight months of decline

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Japan’s exports fell 8.2 per cent in August to 6.14 trillion yen (US$57.2 billion), with the biggest declines coming from computer and semiconductor-related goods, including semiconductor machinery and integrated circuits, as well as car parts. Photo: Reuters

Published: 5:15am, 27 Sep 2019Updated: 7:28pm, 27 Sep 2019

Export-driven Singapore does not envisage an improvement in its trade performance in the second half of the year, according to a senior trade ministry official, reflecting the gloomy outlook held across Asia as global trade tensions halt a recovery in export growth.

From South Korea’s semiconductors to Singapore’s electronic products, exports are sputtering amid a global contraction in trade brought about by economic and political uncertainties and the trade war between China and the United States.

“We are expecting our trade performance in the second half of this year to be broadly similar to what happened in the first half,” Gabriel Lim, permanent secretary for Singapore’s Ministry of Trade and Industry, told the South China Morning Post recently.

The city state’s non-oil domestic exports, a benchmark indicator, shrank 10.7 per cent in the first half of the year, according to Enterprise Singapore, a government agency.

Due to the deterioration of the trade environment, Singapore’s growth decelerated sharply during the first half of the year, with second-quarter gross domestic product growth falling to 3.4 per cent, compared with 3.8 per cent quarterly growth in the first three months of the year.

Singapore and other Asian export-driven economies, where technology products account for a large proportion of their trade profile, have been squeezed by the electronics down cycle and decreased demand from China, a major importer of components for finished products.

The tariff war between Beijing and Washington, as well as regional tension between Japan and South Korea, has rippled through tightly integrated global supply chains.

The downturn [of the electronics cycle] will definitely reverse itself in time to come. The question is how long it will last

Gabriel Lim