Market Highlight 31.12.2024
China’s share of trade with the United States has fallen to its lowest level since joining the World Trade Organization in 2001, while it prepares for the possibility of higher tariffs under President Donald Trump’s forthcoming term. Data from Chinese Customs indicates that the U.S market accounted for 11,2% of China’s total import-export turnover in the first 11 months of 2024, a 4,6% decline compared to 2001. China has notably reduced its dependence on U.S trade since the tariff war erupted in 2018 and 2019, during President Trump’s initial term. Prior to that, a downward trend began to emerge in 2005, when China shifted its strategy to boost exports to fast-growing emerging economies. Although export share to the U.S briefly rebounded in 2013 under President Xi Jinping, it dropped by 2,5% in 2019 alone - the peak of the trade war between the two countries. Forecasts suggest that if the incoming U.S administration proceeds with a 60% tariff hike on Chinese goods, China’s 2025 economic growth could slow from 4,7% to 3,4%. Meanwhile, the bulk of China’s exports are now heading toward Southeast Asia. In the first 11 months of 2024, exports to this region totaled over 520 billion USD, representing 16% of China’s total exports - higher than any other country or economic bloc.
The USD/VND exchange rate rose by an additional 35 VND yesterday, closing at 25.485 amid market expectations that external factors may continue fueling exchange rate gains in early 2025. The State Bank of Vietnam (SBV) resumed supplying USD to certain interbank participants once the rate surpassed 25.450. The market is forecast to remain above 25.450 on this final trading day of 2024.
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