ChileHungaryCzechIsraelSouthKoreaMexicoPolandTurkeyArgentinaBrazilChinaColombiaIndiaIndonesiaRomaniaRussiaSaudiArabiaSouthAfricaSingaporeMalaysiaVietnamThailand0%10%20%30%0%20%40%60%80%ExportstoChina(%exports)ExportstoUS(%totalexports,FOB)ChileCzechRep.HungarySouthKoreaMexicoPolandTurkeyArgentinaBrazilChinaColombiaIndiaIndonesiaRomaniaRussiaSaudiArabiaSouthAfrica0%50%100%150%200%0%10%20%30%40%50%Totaltrade(exports+imports,%ofGDP)Employmentsustainedfromforeigndemand|FOCUS24/07/20191EMECONOMICS|EMSTRATEGYFOCUS|EMERGINGMARKETS24July2019EmergingMarkets–Tradetensionshurt,butunevenlyInternationaltrademattersforEMs:Whiletradetensions(risingtariffsandtechnologydisputes)cancreateindividualwinnersandlosersthroughtradediversion,theirnetimpactonglobaltradeisnegative,astheycoulddisruptglobalvaluechainsandadduncertainty.Inaddition,slowerglobalgrowthtendstodampenEMtradeflows(seeourEMtradetracker,dated18July).WithinEM,whoismostexposedtotrade?MeasuredasashareofGDP,trade(exportsplusimports)ishighestfortherelativelysmallerandopenAsianeconomies,includingVietnam,Malaysia,SingaporeandThailand(Fig.1).WithinCEEMEA,traderepresentsalargeshareoftheeconomyinHungaryandtheCzechRepublic,and,toalesserextent,Poland.TradenumbersarealsoconsistentwithOECDdataondomesticemploymentsustainedbyforeigndemand(Fig.2).Bycontrast,atfacevalue,traderepresentsarelativelysmallershareoftheeconomyinLatam,withtheexceptionofMexicoand,toalesserdegree,Chile(Fig.1).WheredoEMexportsgoto?Unsurprisingly,givenitsgeographicalproximity,emergingAsiahasstrongtradelinkswithChina,especiallyforSouthKorea.Likewise,tradeincentralandeasternEuropeiscloselylinkedtotheEurozone,astheCEEisalargemanufacturinghubfortheEU(Fig.1).Byimportingthebulkoftheworld’scommodities,ChinamattersasanexportdestinationelsewhereintheCEEMEA−forexample,forSouthAfrica(ironoreandcoal)andSaudiArabia(oil).WealsoflagthatChinesedemandimpactstheCEEthroughitslinkstoGermany’sexporters.ForLatam,ChinamattersforChile(copper)andBrazil(soybeanandironore).Infact,remarka...
