The impact of China’s slowdown is being felt across Pacific Asia, with Australia and South Korea’s trade sectors experiencing drastic slowdowns.

A recent stock market event, combined with weak demand for commodities, currency devaluation and slowing economic growth have raised fears over the world’s biggest trading nation and the most important component in the Asian supply and value chains.

These fears have been reflected in Korea’s exports, which fell by 14.7% in July – the biggest drop in six years. No country exports more to China than Korea. An 8.8% drop in shipments to China was compounded further still by 20% falls in the exports to both Japan and the EU.

One senior underwriter for an insurance giant tells GTR that while there has not been a significant increase in total credit defaults around the region, since the beginning of the year, non-performing loans have become more concentrated in the trade sector. Firms who took out commodity-backed loans are now struggling to recoup the loan value on depressed commodities markets.

Meanwhile Australia has reported its lowest nominal GDP growth since 1962, standing at 1.8% for the first half of the year. Economic growth was registered at 0.2% for the same period, meaning that Australia is growing at a slower rate than the eurozone.

The mining boom which has defined the last decade appears to be over amid nosediving demand for key commodities such as iron ore and coal, with prices following suit.

Looking at the region, the impact of slowing demand in China will probably impact the demand in commodity-driven economies. Mahamoud Islam, Euler Hermes

“Looking at the region, the impact of slowing demand in China will probably impact the demand in commodity-driven economies in the region but also the countries that are trade sensitive and highly dependent on China’s value chain,” senior Asia economist at Euler Hermes Mahamoud Islam tells GTR.

The Australian Treasurer Joe Hockey described people predicting an Australian recession as “clowns” in June. But while he has blamed the poor exports performance (a 0.7% contraction) on poor weather at ports, a glance at the data shows a mining and resources sector in serious difficulty.

Engineering construction fell by 0.8%, as a raft of mining projects ground to a halt – most notably the enormous Adani coal mine in Carmichael, Queensland, which has lost the majority of its debt backers over recent months.

Analysts have called time on the halcyon days of Australia’s extractive industries, with some having predicted the GDP slump pertaining to the end of the mining boom for some time now. Hockey’s comments may well return to haunt him.

Downward growth forecasts have become commonplace across Asia-Pacific, particularly in commodity exporting countries. Many of these revisions are driven by weakening trade. Indonesia, Malaysia and New Zealand are all reliant on China to buy their natural resources and can therefore expect to be in the line of fire for any shockwaves emanating from the country.

Indeed, Indonesia’s exports slowed for the third quarter in a row last time out – although it is certain that the country’s ever-changing and complex mining export regulations have contributed to that, along with lower prices and demand from China.

Speaking to GTR from Jakarta, Aziz Haydarov, an economist at the Asian Development Bank, says that while there is natural concern about the situation in China, he is relatively confident that Indonesia’s “fiscal stability” will be requisite to see it through the storm.

In the Philippines, exports have declined every month since December 2014, with the exception of March, with the chief of the country’s economic authority Arsenio Balisacan blaming the malaise on “weak external demand”.

Japan’s exports have slowed too, with July’s volume of goods shipped falling by 0.7% year on year. Goods shipped to China fell by some 1.3%, a much bigger contraction than the Asia-wide figure of 0.4%.

However, Marcel Theliant of Capital Economics says in an email exchange that he is not predicting a prolonged slump. “I don’t think trade with China will slow much further. We expect growth in China to slow from 7% to 6.5%. But that is still much faster than in most of Japan’s other large trading partners, so China should regain importance after losing export market share in recent years,” he says.

He adds: “There is no evidence that Japanese firms are suffering from a collapse in Chinese demand. Nonetheless, the strengthening of the yen and the renewed fall in crude oil prices that have both been triggered by concerns over whether China will reduce import costs and make it even harder for the Bank of Japan to hit is 2% inflation target any time soon.”