By Andrei Skvarsky.
Asia’s frontier markets in general have relatively low dependence on exports and are unlikely to be affected by Donald Trump’s anticipated tariff rises while potential higher U.S.-Chinese trade and political tensions may benefit frontier market nations such as Vietnam, fund manager Asia Frontier Capital (AFC) argues.
Exports are responsible for a relatively low percentage of gross domestic product in South Asian and Central Asian countries that make up the bulk of Asia’s frontier markets, according to AFC.
Furthermore, countries such as Bangladesh, Pakistan and Sri Lanka are undergoing economic recoveries that are largely independent of U.S. trade policies or American presidential elections, the Hong Kong-based company says in a newsletter.
Vietnam, however, is heavily dependent on exports, to the United States among other countries, but has benefitted from a global supply chain shift brought about by higher U.S. duties on imports from China and from consequent Chinese-American political tensions, AFC says.
Further rises in these duties and tensions are likely to continue to benefit Vietnam, the firm says.
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