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Recovery？

South Korea, the canary in the global economy, has returned to growth for the first time in more than a year, in one of the clearest signs of a recovery in global demand that will offer some comfort to investors and policymakers watching the health of global business.

Meanwhile, in Vietnam, another Asian country, exports are picking up. It is reported that Vietnam’s important pillar industry – textile exports have rebounded from the bottom of $3 billion at the end of May, and orders in the fourth quarter of this year have shown obvious signs of recovery.

South Korea’s exports are growing for the first time in more than a year

The latest data released by South Korea Customs on Monday showed that average daily shipments in the first 20 days of October rose 8.6 percent from a year earlier, the first positive growth since September last year.

The latest trade report showed that South Korea’s overall 20-day exports for the month, excluding differences in working days, rose 4.6 percent from a year earlier, while imports rose 0.6 percent. South Korea’s exports to global demand powerhouse China fell 6.1 percent, the smallest decline since last summer, while exports to the United States surged 12.7 percent. The data also showed that export shipments to Japan and Singapore increased by 20% and 37.5%, respectively.

In the first 20 days of this year, South Korea’s semiconductor export sales reached about 5.2 billion U.S. dollars, down 6.4 percent year-on-year, but the data showed that this was much smaller than the 14.4 percent decline in September. South Korea Customs also said the trade deficit in the first 20 days widened significantly to $3.7 billion, compared with a deficit of $488 million in the same period last month.

The increase is a positive sign that world trade is beginning to resume its expansion process after the global economic slowdown. As a canary in the global economy, South Korea publishes export data earlier than many economies, and because of its key position in global supply chains and technology, its export data is closely watched by global investors for an early look at the direction of world trade.

The increase is also an encouraging sign for South Korea’s economy, given its heavy reliance on external demand to drive growth.

Policy makers in Seoul have expressed hope in recent months that full-month exports will return to year-on-year growth by the end of the year. That would support stronger economic growth numbers if, as preliminary data for October suggest.

Vietnam’s textile exports are growing again

Despite the difficulties, Vietnam’s textile exports have rebounded from a low of $3 billion at the end of May. Orders for the fourth quarter of 2023 have shown clear signs of recovery.

The textile industry is one of the most difficult industries in the first three quarters of this year. According to statistics from the General Administration of Customs, in the first eight months of this year, textile exports were only 22.5 billion US dollars, a decrease of 3.8 billion US dollars (14.4 percent), ranking 37th among 45 categories of commodities with export declines. Among them, exports to the traditional market of the United States was only $10 billion, down 22.4%.

Although textile exports fell 14.4% to 37.6% year-on-year for eight consecutive months, the industry has begun to show significant signs of recovery and welcome development opportunities. Specifically, in the first August, exports to Japan reached 2.58 billion US dollars, an increase of 1.7%; Textile exports in August reached $3.4 billion, the highest level in nearly 11 months, an increase of 5.5%, but also four consecutive months of positive growth.

According to Tran Ngok Lian, president of the Ho Chi Minh City branch of the Federation of Vietnam Chambers of Commerce and Industry, export activity to the US has shown signs of recovery, with exports in August reaching $1.5bn, up 2.3 per cent from the previous month. In addition, US President Joe Biden’s visit to Vietnam and the upgrading of Vietnam-US relations to a comprehensive strategic partnership have opened the door to opportunities for exports of textiles and even various products.

The commercial counselor of the Vietnamese Embassy in the United States, Du Yuxing, said that the export growth prospects of 10 main export commodities, including textiles, leather and footwear, wood products, aquatic products and electronics, are optimistic from now to the end of the year. According to the statistics of various international organizations and market research organizations, the inventory of the United States is currently falling sharply, so American importers will purchase products from many countries such as Vietnam. This is a positive sign for Vietnam’s commodity export activity.