A sudden influx of cheap goods from China can play an extremely deregulative role for emerging economies, especially in Asiacausing greater commercial imbalances, stronger deflation and greater budget spending, according to Nomura analysis.
For 45 countries, Nomura economists led by Rob Subbaraman mapped the share of China’s imports to local manufacturing production (Asia), finding that The economies that recorded the biggest increases in Chinese goods tended to see the steepest slowdown in local processing. They also saw a “strong negative relationship” between the share of China’s imports and the inflation of producer prices.
Nomura’s survey also revealed that China was flooding economies with cheap goods even before Donald Trump assumed duties for a second term as US president.
“As expected by these results, the year 2024 marked a significant increase in the total number of commercial investigations that began against Chinese imports at record levels, mainly in the form of anti -dumping measures,” Subbaraman said.
“The results are disappointing,” he said. “This year, with the US-China trade war in full swing, the results illuminate how exposed the economies to the flood of cheap imports from China that turns into a flood, especially those of Asia.”