東盟與中日韓宏觀經(jīng)濟(jì)研究辦公室（AMRO）：東盟與中日韓地區(qū)經(jīng)濟(jì)展望季度更新2023年10月

ASEAN+3RegionalEconomicOutlookUpdate,October2023

QuarterlyUpdateofthe

ASEAN+3RegionalEconomicOutlook(AREO)

ASEAN+3MacroeconomicResearchOffice(AMRO)

Singapore

October2023

Thisreportwasco-authoredbyMeganChong,MartheM.Hinojales(lead),CatharineKho,andAnthonyTan,underthesupervisionofAllenNg(allRegionalSurveillance),withcontributionsfromAMROcountrydeskeconomistsandtheMacro-FinancialResearchGroup.ThereportwasreviewedbyAMROSeniorManagementandapprovedbyHoeEeKhor(ChiefEconomist).

Unlessotherwiseindicated,theanalysisinthisreportisbasedoninformationavailableupto29September2023.Forbrevity,“BruneiDarussalam”isreferredtoas“Brunei”,and“HongKong,China”isreferredtoas“HongKong”inthetextandfigures.

ASEAN+3RegionalEconomicOutlookUpdate,October2023

0

-5

-10

Netexports

Changesininventories

Highlights

?ResilientdomesticdemandandrobusttourismflowsaresupportingeconomicactivityacrosstheASEAN+3region,amidcontinuedweaknessinexternaldemand.

?Despitetheanticipatedweaknessintheglobaleconomynextyear,theregion’sgrowthisforecasttoremainrobustat4.5percent—inviewoftheexpectedturnaroundintradeandimprovinggrowthmomentuminChina.

?Inflationintheregionisexpectedtomoderatein2024,butatahigherratethanpreviouslyexpectedgivenelevatedcommoditypricesandstill-highcoreinflation.Theriskofhigherinflationhasalsoincreased.

RegionalEconomicDevelopmentssincetheJuly2023AREOUpdate

Domesticdemandremainsthemain

engineofASEAN+3growth.Strong

employmentconditionsandimproving

householdincomescontinuedtounderpinthestrengthofprivateconsumption(Figure1).Activitiesindomestic-orientedsectors—suchasretailtradeandfoodand

beverage—havealsobeenbolsteredbytherobustrecoveryintravelandtourism.

Strongconsumerspending,inturn,has

helpedimprovebusinesssentimentacrosstheregiondespiteexternalheadwinds,andinvestmentactivityhassteadilyexpandedinseveraleconomies.

However,economicrecoveryinChinahasnotbeenasstrongasexpected.

Aftertheinitialboostofgrowthpost-

Figure1.SelectedASEAN+3:ContributiontoRealGDPGrowth

(Percent,year-on-year;percentagepoints)

10

5

Grossfixedcapitalformation

Governmentconsumption

Privateconsumption

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2

2019

2020

2021

2022

2023

Source:NationalauthoritiesviaHaverAnalytics;AMROcalculations.

Note:Statisticaldiscrepanciesarenotshown.ExcludesCambodia,China,LaoPDR,Myanmar,andVietnamduetodataunavailability.

reopening,Chinaweakenedinthesecondquarter.Thealready-distressedrealestatesectorfacedadditionalshocksinrecent

months,whichhasweigheddownonoverallinvestmentandconsumer

sentiment.Nevertheless,outsideofthereal

estatesector,signsofrecoveryare

emergingininvestmentandmanufacturing(Figure2).Recentpolicysupportmeasuresshouldfurtherboostthesepositivesigns.

Theworstmaysoonbeoverfor

ASEAN+3goodsexports.Withmuted

demandfrommajortradingpartnersand

thedowncycleoftheglobalelectronics

sector,ASEAN+3goodsexportsremainedweak(Figure3).Theinitialpick-upinexportvolumes—beginningApril2023—has

stalledinJuly,reflectingthedragon

China’sexports.Nevertheless,the

contractionappearstobeeasingacrossthe

Figure2.China:SelectedActivityIndicators

(Index,50andabove=expansion)

60

55

50

45

40

Jul-2022Nov-2022Mar-2023Jul-2023

ManufacturingPMIPMI:Output

IndustrialproductionPMI:Neworders

Servicesproduction

Source:NationalauthoritiesviaHaverAnalytics;AMROstaffestimates.

Note:Areadingabove50indicatesanexpansioninactivities,whileareadingbelow50indicatesacontraction.

ASEAN+3RegionalEconomicOutlookUpdate,October2023

40

30

20

10

0

-10

-20

-30

region:7outof10economieshaveseen

improvingexportvolumesinthelastthreemonthscomparedtotheirJanuary?April

averages.TheJuly?AugustPurchasing

Managers’Indexindicatorsonfutureexportorderslikewisepointtolesspessimism

amongASEAN+3exporters.

Figure3.SelectedASEAN+3:ExportGrowth

(Percent,year-on-year)

40

30

20

10

0

-10

-20

-30

20192020202120222023

Goodsvolume

Goodsvalue(USD)

Servicesexports(quarterly,USD)

Source:NationalauthoritiesviaHaverAnalytics;AMROstaffcalculations.

Note:GoodsexportsdataareuptoJuly2023andare3-monthmovingaverages;servicesexportsdata(quarterly)areuptoQ12023.

Non-techexportsarecontractingless,

providingsomecounterbalanceagainstthesharpweaknessinchips-relatedexports

(Figure4).ThevalueofASEAN+3auto

exportsinthefirsthalfof2023grewabout50percentyear-on-year,inpartreflecting

theongoingpick-upindemandfordurablegoodsintheUnitedStates.Thelatterwill

besupportiveoftheregion’sshort-term

exportoutlook,despitesignsof(services-

led)moderationinoverallUSeconomic

activity(Figure5).Meanwhile,chipsexportsshouldbeanadditionalgrowthdrivernext

yearastheglobalsemiconductorcyclegraduallymovesupward(Box1).

Brisktourismactivitycontinuestolift

theregion’sserviceexports.ASEAN+3

touristarrivals,onaverage,haveexceeded70percentoftheirpre-pandemiclevelinthesecondquarterof2023(Figure6).Serviceexportsacrossmosteconomiesareat

about80percentoftheir2019values,

exceptinThailandandCambodia—around60percent—giventheirbigtourismsectors

andexposuretoChinesetourists.

ASEAN+3touristvolumeisexpectedto

fullyreturntoitspre-pandemiclevelnext

year,asoutboundChinesetourismpicksuppace.

Figure4.SelectedASEAN+3:ExportGrowth,byProductType

(Index,Q22022=100)

105

100

95

90

85

80

Jun-22Sep-22Dec-22Mar-23Jun-23

NontechTech

Source:IHSMarkit;andAMROstaffcalculations.

Note:DatareferstoexportvaluesinUSdollars.“Tech”coversgoodsthatfallunderHScodes8541?42and8486(allsemiconductor-

related).DataexcludesCambodia,Myanmar,andLaoPDR.

Figure5.UnitedStates:GrowthinPrivateConsumption

(Percent,year-on-year)

Boostfromreopening

Reboundindurablegoodsdemand

Stayathomeorders

COVID-19(firstwave)

Jan-19Jan-20Jan-21Jan-22Jan-23

DurablesServices

Source:NationalauthoritiesviaHaverAnalytics;andAMROstaff.

Figure6.SelectedASEAN+3:TouristArrivals

(Index,2019=100)

150

100

50

0

Jan-19Jul-20Jan-22Jul-23

ASEAN-5Plus-3exChinaCMV

Source:NationalauthoritiesviaHaverAnalytics;AMROstaffcalculations.

Note:ExcludesLaoPDRduetodataunavailability.ASEAN-5=

Indonesia,Malaysia,Philippines,SingaporeandThailand.CMV=Cambodia,MyanmarandVietnam.June-July2023arrivalsdataforMalaysiaandMyanmarareAMROstaffestimates.

ASEAN+3RegionalEconomicOutlookUpdate,October2023

Inflationacrosstheregionrosetowardstheendofthethirdquarter,drivenby

higherenergyandfoodprices(Figure7).InSeptember,crudeoilpriceshittheirhighestsincethestartof2023,followingSaudi

ArabiaandRussia’sdecisiontoextendtheiroilproductioncutsuntiltheendofthisyear.Meanwhile,theunexpectedlydryweather

conditionsduetoElNi?o,compoundedbyexportrestrictionsbykeyproducers,has

disruptedagriculturalsupplyandledtothespikeinfoodprices.Coreinflationremained

higherthanheadlineinflationinsome

economies,mainlyreflectingstrong

demandpressures.

Figure7.ASEAN+3:HeadlineConsumerInflation

(Percent,year-on-year)

8

6

4

2

0

45

30

15

0

Jan-2022Jul-2022Jan-2023Jul-2023

Plus-3ASEAN-5BCVLA(rightaxis)

Source:NationalauthoritiesviaHaverAnalytics.

Note:ASEAN-5=Indonesia,Malaysia,Philippines,Singapore,andThailand;BCV=Brunei,Cambodia,andVietnam;LA=LaoPDR.

ASEAN+3financialmarketscameunderrenewedpressureinthethirdquarter

followingconcernsoverChina’sgrowth

prospectsandtheglobalinterestrate

outlook.EquitymarketsacrosstheregionweakenedinAugustasthedefaultof

anotherlargepropertydeveloperinChinasparkedconcernsoverthelikelihoodofasystemiccrisis.Meanwhile,continued

interestrateincreasesinadvanced

economieshavepushedupASEAN+3bondyieldswhileputtingdownward

pressureonmanyoftheregion’scurrencies(Figure8).

Monetarypolicyremainstightinmost

ASEAN+3economies.SincetheJuly2023AREOUpdate,twoeconomieshaveraised

theirpolicyrates:HongKonginJuly,inlinewiththeincreaseintheUSFederalFunds

rate,andThailandinAugustand

September,givenexpectationofcontinuedeconomicrecovery.Incontrast,China

reduceditsone-yearprimelendingratebyanadditional10basispointsinAugust—followingasimilarmoveinJune—inordertoboostdomesticdemand.Elsewhereintheregion,policyratesremained

unchanged,withcentralbanksmaintainingatightmonetarypolicystanceamid

continuedinflationarypressures(Figure9).

Figure8.SelectedASEAN+3:ExchangeRatesAgainsttheUSDollar

(Changefrom31Dec2019,percentagepoints)

10

0

-10

-20

-30

-40

Dec-20Jul-21Feb-22Aug-22Mar-23Sep-23

CNJPKRSGASEAN-4

Source:NationalauthoritiesviaHaverAnalytics.

Note:DataareuptoAugust2023.ASEAN-4isthesimplemeanofchangessinceDecember31,2019inbilateralexchangerateofIndonesia,Malaysia,PhilippinesandThailandagainsttheUSdollar.CN=China;JP=Japan;KR=Korea;SG=Singapore.

Figure9.SelectedEconomies:PolicyInterestRates

(Percent)

8.0

6.0

4.0

2.0

0.0

-2.0

Jan-2018

US

JPPH

Nov-2019

EU

KRTH

Sep-2021

CNID VN

Jul-2023

HKMY

Source:NationalauthoritiesviaHaverAnalytics.

Note:DataareuptoAugust2023.Policyratesrefertoone-yearprimelendingrate(China,CN);seven-dayreversereporate

(Indonesia,ID);thetargetrateforthe10-yeargovernmentbondyield(Japan,JP);baserate(HongKong,HK;Korea,KR);

overnightpolicyrate(Malaysia,MY);overnightreversereporate(thePhilippines,PH);one-dayrepurchaserate(Thailand,TH);

refinancingrate(Vietnam,VN);federalfundsrate(upperrange)(UnitedStates,US);anddepositfacilityrate(euroarea,EU).

ASEAN+3RegionalEconomicOutlookUpdate,October2023

RegionalEconomicOutlook

Theregion’s2023growthestimateis

reviseddownwardsfromtheJuly2023

AREOUpdate.Full-yeargrowthisexpectedtocomeinat4.3percent,from4.6percentpreviously.Thismainlyreflectsthe

downwardadjustmentforChinatoreflectitsactualoutturninthesecondquarter,whichinturnoffsettheforecastupgradeforJapan

(Table1).Nevertheless,ASEAN’saggregategrowthestimatefor2023remainslargely

unchanged,buttressedinpartbystrongprivatesectorspendingandcontinuingrecoveryintourism.

Thegrowthforecastfor2024is

maintainedfromJuly.TheASEAN+3

regionisstillexpectedtogrowby4.5

percentin2024—despitealesssanguineoutlookfortheglobaleconomy—asthe

effectofChina’spolicysupportmeasureswillbefeltincreasinglynextyear.Gradualadjustmentinitspropertysectorshould

helpaugmentgrowthinChina,withpositivespillovereffectsacrosstheASEAN+3.

Strongertourismflowswillbe

supplementedbytheexpectedpick-upin

manufacturingexports.However,the

weakerpaceinglobalgrowthwillkeepalidonthespeedoftheregion’sexpansion.

Nextyear’sheadlineinflationforecast

forthe12ASEAN+3economies1is

revisedupwards.Thisyear’sinflationis

forecastat2.9percent,takingintoaccountsofter-than-expectedfoodandenergy

pricesearlierthisyear.In2024,headline

inflationisstillexpectedtomoderate,buttoahigherratethanpreviouslyanticipated.

HalfoftheASEAN+3regionisnow

expectedtoseehigherinflationratesin

2024comparedtotheJulyassessment,

giventheupwardtrendinglobalcommoditypricesandstill-elevatedcoreinflationin

severaleconomies.

1ThisexcludesLaoPDRandMyanmar.Inflationdynamics

inbotheconomiesarebeingcompoundedbythe

depreciationoftheirrespectiveexchangerates.

Theoverallbalanceofrisktotheoutlook

hasshifted,withtheriskofhigher

inflationbecomingmoresalient.WhiletheriskoffinancialspilloversfromtighterUSmonetarypolicyhassubsided

somewhatsincetheJuly2023AREO

Update,theriskofasurgeinglobalenergyandfoodpriceshasheightened(Figure10).Broadly,the4mainrisksthatcouldimpactthe2023?24baselineforecastsinclude:

?Spikeinglobalcommodityprices.

Worse-than-expectedElNi?oconditionsandadditionalexportrestrictionson

foodstaplescouldfurtherpushup

pricesintheglobalmarket,whilefurtherextensionsofoilsupplycutsintonext

yearwouldkeepenergypriceselevatedforlonger.ThenegativeimpactontheregionwillbesharperiftheUkraine

crisisescalatesintandem.Weaker

regionalcurrenciesvis-à-vistheUS

dollarwouldfurtheramplifyanyterms-of-tradeshock.

?RecessionintheUnitedStatesandEurope.Whilefearsofrecessionin

advancedeconomieshavediminishedinrecentmonths,itcannotbefully

discounted—especiallyifinterestratesintheUnitedStatesandEuroperemainhigh(er)foranextendedperiod.Inan

alternativescenariowhereboththe

UnitedStatesandEuropefallinto

recessionin2024,ASEAN+3growthcoulddiptobelow3percent—the

weakestgrowthsince1998outsideofthepandemic-inducedslowdownin

2020(Figure11).

?Slower-than-expectedeconomic

recoveryinChina.TheweaknessinChina’spropertysectorcouldworsen,whichinturncouldtranslatetobroaderriskstothefinancialsystem(Box2).

Localgovernments’fiscalstrains

ASEAN+3RegionalEconomicOutlookUpdate,October2023

RecessionintheUnited

Statesandeuroarea

SlowergrowthinChina

0.0

-0.2

-0.5

-1.0

-1.2

-1.5

ImpactonASEAN+3excludingChina

-1.6

-2.0

-0.2

-2.0

Figure10.RegionalRiskMap,October2023

Source:AMROstaff.

couldalsoimpingeonthegrowth

outlook.IfChina’seconomyslowsto4.3percentnextyear—orafullpercentagepointbelowthebaselineforecast—

aggregategrowthforotherASEAN+3

economiescouldbe1.6percentagepointslower—resultingfromthe

decreaseintrade,investment,and

tourism(seeFigure11).

?Financialspilloversfromtight(er)USmonetarypolicy.InflationhaseasedintheUnitedStates,butitremains

elevated.Theresurgenceinglobal

commoditypriceshascastintoquestiontheexpectedpauseinUSmonetary

policytightening.Sustainedhigher

interestrateswillamplifytheriskof

financialdistressacrosstheUS

economy.Thenegativeimpacton

ASEAN+3willmanifestthroughhigherdomesticinterestratesand,asrisk

aversionheightens,greatervolatilityinfinancialmarketsandcapitalflows.

Furtherintotheriskhorizon,US-Chinageopoliticaltensionsremainmost

pertinenttoASEAN+3growthprospects.

TensionsbetweenChinaandtheUnitedStatessurroundingtradeandtechnology

Figure11.ASEAN+3:ImpactofSelected

AdverseScenarioson2024GDPGrowthandInflation

(Percentagepoints)

ImpacttoGDPImpacttoinflation

Source:OxfordEconomicsandAMROstaffestimates.

Note:RecessionscenarioassumesthatboththeUSandeuro

areacontractby0.5percentin2024.Estimatesrefertothe

impactonPlus-3andASEAN-5economies,whichaccountfor96percentofASEAN+3’sGDPin2022(purchasingpowerparity

basis).Aggregateforinflationiscomputedusingsimple

averaging.Remainingeconomiesareomittedduetodata

unavailability.

remainhigh.Furtherescalation,throughadditionalorbroaderrestrictionsoneitherside,wouldadverselyimpactexisting

ASEAN+3tradeandinvestmentflows,

giventheinterconnectednessinthe

globalsupplychains.Inthelongerterm,chronicclimatechanges,theemergenceofnewinfectiousdiseases—especiallyinthecontextoftheregion’saging

population—andgrowingcyberthreats

arethekeyrisksconfrontingthe

ASEAN+3region.

ASEAN+3RegionalEconomicOutlookUpdate,October2023

Table1.ASEAN+3:AMROGrowthandInflationProjections,2023-24

Economy

GrossDomesticProduct

(Percentyear-on-year)

ConsumerPriceIndex

(Percentyear-on-year)

2022

(Actual)

AREO2023QuarterlyUpdate

July2023

October2023

2024f

2023e

2024f

2023e

2022

(Actual)

AREO2023QuarterlyUpdate

July2023October2023

2023e

2024f

2023e

2024f

ASEAN+3

3.2

4.6

4.5

4.3

4.5

6.5

6.3

3.4

6.5

3.8

ex.LaoPDRandMyanmar

—

—

—

—

—

4.1

3.0

2.4

2.9

2.6

Plus-3

2.6

4.6

4.3

4.3

4.4

2.9

2.4

2.0

2.4

2.0

China

3.0

5.5

5.2

5.0

5.3

2.0

1.2

1.8

0.6

1.4

HongKong,China

-3.5

5.2

3.0

4.7

3.3

1.9

2.3

2.5

2.3

2.5

Japan

1.0

1.4

1.1

1.9

1.1

2.5

2.9

1.6

3.1

1.9

Korea

2.6

1.4

2.3

1.3

2.4

5.1

3.2

2.2

3.4

2.3

ASEAN

5.6

4.5

5.1

4.4

5.0

7.9

7.8

4.0

8.2

4.5

BruneiDarussalam

-1.6

1.0

2.2

1.1

2.0

3.7

0.9

0.7

1.0

1.1

Cambodia

5.2

5.7

6.2

5.3

6.2

5.4

2.8

3.0

2.3

2.7

Indonesia

5.3

5.0

5.3

5.0

5.2

4.2

3.9

2.8

3.8

2.8

LaoPDR

4.4

4.8

5.0

4.8

5.0

23.0

25.7

8.0

30.0

11.2

Malaysia

8.7

4.2

5.2

4.2

5.2

3.3

3.1

2.6

3.1

2.6

Myanmar

1.2

2.2

2.8

2.2

2.8

18.2

26.0

11.0

26.0

11.0

ThePhilippines

7.6

6.2

6.5

5.9

6.5

5.8

5.9

3.8

5.5

3.8

Singapore

3.6

1.3

2.9

1.0

2.9

6.1

5.4

3.6

5.2

4.1

Thailand

2.6

3.9

4.0

3.5

3.9

6.1

1.9

1.8

1.6

2.0

Vietnam

8.0

4.4

6.4

4.7

6.0

3.2

2.9

2.7

3.3

3.4

RevisedupwardsfromJulyReviseddownwardsfromJulyMaintainedfromJuly

Source:NationalauthoritiesviaHaverAnalyticsandAMROstaffestimates.

Note:AREO=ASEAN+3RegionalEconomicOutlookreport.e=estimate,f=forecast.Regionalaggregatesforgrowthareestimatedusingtheweightedaverageof2022GDPonpurchasingpowerparitybasis;regionalaggregatesforinflationarecomputedusingsimpleaveraging.Myanmar’snumbersarebasedonits(old)fiscalyearwhichrunsfromOctober1ofthepreviousyeartoSeptember30ofthecurrentyear.

ASEAN+3RegionalEconomicOutlookUpdate,October2023

Box1.CanASEAN+3TradeLookForwardtotheGlobalElectronicsUpcycle?1

WithelectronicsaccountingforalargeshareoftheASEAN+3’smanufacturingbase,theboom-

bustcyclesthataffecttheglobalsemiconductorsectorhavesignificantconsequencesonthe

region’sexportperformance.TheweaknessinASEAN+3manufacturingactivityin2022hadbeen,inpart,exacerbatedbythesector’scyclicaldownturn:thechipsshortagetriggeredbyCOVID-19

turnedintosupplyglutasmanufacturers,whohadstockpiledchipstobuildinventories,werehitbyadeclineinfinaldemandastheglobaleconomyslowed.

AMRO’sanalysisoftheglobalsemiconductorcyclespointstoaninitialrecoveringoutlookbyyear-end(FigureA1).Forsomedevices,the“replacementcycle”—orthetimeittakestoreplaceanoldunit—suggeststhatdemandisduetopickupsoon,toreplacethoseboughtduringCOVID-19.2Theimpactacrosstheregionwillvaryinspeedandtiming.Thenon-memorysegmentislikelytoreturntoexpansionaryterritoryfirst,whichshouldhelpsupportmanufacturinginChinaandJapan.The

recoveryinmemorychips—whichcomprisebulkofASEAN+3chipexports,drivenbyKorea—islikelytomaterializelaterin2024,comingfromitssecond-deepesttroughsincethe2000s.Thisshouldhavepositivespilloverstoothersintheregionthatareinvolvedinoutsourced

semiconductoractivity(e.g.,assemblyandtesting),likeMalaysia,Singapore,andthePhilippines.

Thereisanotherdriverofexportdemandonthehorizon:theeventualrecoveryincapitalspendingglobally.Recoveryinthedemandfortechnologyhashistoricallylednewcapitalexpenditure

(capex),basedonempiricaldata.Thecorrelationbetweenthesemiconductorcycleandthecapexcycleisabout0.60,slightlyhigherfornon-memoryat0.65.3Barringnewshocks,thereplacementcycleshouldhelpdrivethe“firstwave”ofdemandforASEAN+3exports,withthe“secondwave”fromcapex.Thisisalsoinlinewithourexpectationsthatbusinessfixedinvestment,especiallyintheUnitedStates,andtoacertainextent,China,willstarttofirmupbylatenextyear.

US-Chinatensionsoverhightechnology,however,isadownsiderisk.AMRO’sinitialanalysisof

US?Chinasemiconductor-relatedtradeshowthatabouttwo-thirdsfallunderwhattheUnitedStatesconsiders“advancedtechnology.”Nevertheless,thesegoodscompriselessthan5percentof

China’stotalsemiconductor-relatedimports.WithChinaakeydriverofglobaldemandforchips,thisshouldlimittheimpactofcurrentUStechrestrictionsonshort-termprospects.Growthin

China’sdemandforUSnon-advancedsemiconductorgoodshasbeenpositivesinceMarch2023.4

FigureA1.GlobalSemiconductorandCapitalExpenditure(Capex)Cycles

(Percent,year-over-year,6-monthmovingaverage)

120

60

0

-60

-120

Forecast

30

20

10

0

-10

-20

-30

Jan-2007Oct-2009Jul-2012Apr-2015Jan-2018Oct-2020Jul-2023

Capex(rightaxis)MemoryNon-MemoryTotal

Sources:HaverAnalytics;WSTSInc.;andAMROstaffestimates.

Note:SeeBox1.9in

AMRO(2020)

forthemethodology.UnderlyingdatarepresentactualglobalbillingsuptoJuly2023andestimated

monthlybillingsnextyearusingWSTSforecasts.CapexdataarefortheGermany(asproxyforeuroarea),Japan,andtheUnitedStates.

1ThisboxwaswrittenbyMartheM.Hinojales(RegionalSurveillance).

2ThereplacementcycleintheUnitedStates,forconsumersmartphones,forexample,isabout33months.

3CorrelationscalculatedbetweenJanuary2005toJuly2023.

4“Advancedsemiconductors”refertothe39HScodesinthe2022“AdvancedTechnologyProducts”listbytheUSCensusBureauthatbeginwith8541,8542,and8486.Thevaluefor“non-advanced”semiconductorsiscalculatedasthetotalvalueofHScodes8541?42and8486,lessthatof“advancedsemiconductors.”China’simportsofadvancedsemiconductorsaremirroredusingUStradedata.

Box2.AssessingtheRisksfromChina'sPropertySector1

ProblemsinChina’spropertysectorhaveraisedconcernsaboutsystemicrisksintheASEAN+3

region.Market-basedriskindicatorsshowthatfinancialconditionshaveimprovedsinceauthorities’announcementofthe16-pointrescueplaninNovember2022.Priortothat,afinancialstressindexconstructedforChinahadreachedlevelsnotseensincetheCOVID-19pandemic,drivenbythe

propertysector’stroubles.However,financialpressuresabatedshortlyaftertheplan’s

announcement(FigureA2.1).Otherindicatorsalsoshowthatriskhasmoderated.The1-yearto1-monthprobabilityofdefault(PD)ratiohita10-yearlowfollowingthedowngradeofthreemajor

developersinNovemberbuthassincerebounded,asnear-termdefaultconcernseased.2ThePDdistributionspread,whilestillvolatile,hastightened.3Theshareofassetsunderstressfellto13

percentinJuly2023from50percentinOctober2022(FigureA2.2).Whilethedebt-at-riskinthreeindustriesrelatedtothepropertysectoralsoincreasedin2022,liquiditybuffersaresufficientto

covershort-termloans(FigureA2.3).

SpilloveranalysessuggestthatevenifpropertysectorrisksweretomanifestinHongKongand

China’sfinancialsectors,theimpactonthefinancialsystemsintheASEAN+3regionislikelytobelimited(TableA2.1).Thus,spilloversarelikelytobetransmittedviatherealchannel,through

slowergrowthinChinaanditsdemandforimports.AMROanalysissuggeststhata20percent

contractioninrealestateinvestmentinChinacouldleadtoGDPgrowthreductionin9ASEAN+3economiesnextyearbyabout0.2to0.6percentagepoints.4

FigureA2.1.China:DailyFinancialStressIndex

(z-score)

60▲Increaseinoverallfinancialstress

(a)(b)(c)(d)

50

40

30

20

10

0

Jan-20Mar-21May-22Jul-23

FigureA2.2.China:MonthlyPropertySectorRiskIndicators

13

12

11

10

9

(a)(b)(c)(d)

5

4

3

2

1

0

60

50

40

30

20

10

(a(b)(c)(d)

202120222023

PDratio

PDspread(rightaxis)

202120222023

Shareofassetsunderstress

Source:HaverAnalytics;NationalUniversityofSingaporeCreditResearchInitiative;andAMROstaffestimates.

Note:(a)=September2021:Evergrandemissedpaymentdeadline;(b)=March2022:Sunac’screditratingisdowngraded;(c)=June2022:CountryGarden’screditratingisdowngraded;(d)=November2022:China’sannounces16-pointplan;PD=probabilityofdefault.

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