BNP Paribas Warns: China’s Slowing Growth and Rising Export Risks Threaten Global Trade
BNP Paribas economists warn that China’s economy is undergoing a sustained slowdown that poses growing export risks and could reshape global supply chains in 2025–2027. Key datapoints: manufacturing PMI has contracted for seven months, industrial production growth slowed to 4.2% YoY, and retail sales and fixed-asset investment growth have weakened. BNP projects GDP growth of about 4.5–5.0% for 2025 and forecasts export growth sliding to roughly 2.5–3.5% in 2025. The bank’s export-risk model highlights three drivers: geopolitical tensions (tariffs, carbon border measures), supply-chain diversification (China-Plus-One moves to Vietnam, India, Mexico, Eastern Europe), and rising competition in textiles and electronics from lower-cost producers. Technology exports—especially semiconductors—face pronounced pressure from export controls. BNP sees potential sector winners in EVs and renewable equipment but notes regulatory and market barriers abroad. Market reactions include commodity price volatility, pressure on Asian emerging-market currencies, moderated shipping volumes and slower capital expenditure in Chinese manufacturing. Policy responses from China include targeted monetary easing, fiscal and infrastructure support, property regulation adjustments, and efforts to deepen regional trade ties. BNP outlines three scenarios: baseline (4.5–5.0% growth), upside (tech-driven rebound), and downside (worsening trade tensions and deeper property adjustments). For traders, the report implies higher sensitivity in commodity markets, Asian FX and equities to Chinese growth signals, and continued corporate repositioning of supply chains that may shift long-term cross-border investment flows.
Bearish
BNP Paribas’ analysis signals slower Chinese growth and weaker export momentum—factors that historically weigh negatively on risk assets and commodity demand. For crypto markets specifically, China growth slowdowns tend to exert short-term bearish pressure via several channels: reduced demand for commodity-backed risk flows, greater FX volatility in Asian emerging markets, and broader risk-off sentiment that shifts capital away from speculative assets. The report highlights intensified supply-chain shifts and policy uncertainty (tariffs, export controls), which can amplify market volatility. In the short term, traders may see downward pressure on commodity-linked and Asia-exposed tokens, and increased correlation between crypto and risk-off indicators (USD strength, bond rallies). In the medium-to-long term, effects are mixed: slower Chinese growth could dampen macro liquidity and risk appetite (bearish), but structural shifts toward EVs and renewables may support demand for specific commodities and tech investments that indirectly benefit blockchain projects tied to supply-chain finance or tokenized commodities. Past episodes—e.g., China growth scares in 2015 and 2019—produced immediate risk-asset drawdowns and temporary crypto weakness, followed by recoveries as policy responses were deployed. Therefore, the overall expected impact is bearish, with heightened volatility and sensitivity to China data releases and policy announcements.