The big beneficiaries if China economy bounces: HSBC

HONG KONG - Assuming stimulus works and growth rebounds in China, exports from Australia, Taiwan and Thailand would benefit most, followed by South Korea and Indonesia, according to an HSBC assessment.

Chinese officials have rolled out impressive stimulus measures of late and HSBC's Chief China economist, Qu Hongbin, expects more to arrive in the coming months. Thus, the question many clients have been asking is: which neighbour would benefit the most from a potential rebound in Chinese demand?

“(The answer is) that exporters in Taiwan, Thailand, Korea, and India would have most to gain from a potential rebound in Mainland demand, aAnd so would the commodity exporters Indonesia and Australia (less so Malaysia),” HSBC says.

“Remember, however, that the impact on local GDP growth will vary, given (a) the relative importance of the export sector (e.g. small in India, large in Korea) and (b) other local growth bottlenecks (e.g. deleveraging pressures).

“A couple more points. First, EU demand is now more important than US demand for most Asian exporters. So, a growth fizzle in the former would probably offset a rebound in the latter over the coming quarters. Second, swings in China's growth matter more than in the EU, even though Europe is a larger market. So, fingers crossed that China's stimulus works as intended.” www.hsbc.com (ATI).