After years of outstripping global GDP, the growth of world trade is set to remain in line with GDP, according to a noted economist.

Frederic Neumann, who heads up HSBC’s Asia research, tells GTR that the halcyon days of global trade expanding at twice the rate of GDP are gone.

“Since the financial crisis, momentum has stalled and we expect exports in the coming years to expand more in line with global GDP growth. Big importing economies, especially the US and Europe, are no longer growing as briskly but import penetration in countries that are growing faster are either too small to make up the difference or are not as import intensive in their growth, such as China‎,” Neumann says.

The slump can also be partly explained by the thus far only marginal recovery in the US. Neumann says that if the US could return to sustained growth of more than 3%, the impact on trade and exports would be telling and the picture would look different, however few have predicted this with any real confidence.

In a wide-reaching interview that expanded on comments he made in a recent report, Neumann reiterated the view that bank lending in Asia has stalled, but suggested that this would not have the major impact on trade volumes some have predicted.

He said: “The more cautious stance among banks across Asia is unlikely to have a material impact on trade. For example, there are no signs ‎that trade financing is drying up or that funding conditions are tightening considerably. Caution among banks affects other sectors, such as real estate, where after years of rapid credit growth leverage ratios have climbed. However, this is more of a domestic issue than a trade-related issue.”

Countries are too saturated in debt, Neumann said, to embark on the kind of expansionary fiscal policies that would accelerate commercial trade lending. As a result, banks are “struggling with muddy balance sheets” and firms are over-leveraged.

Looking to the positives, Neumann earmarked Vietnam as a market which could help take up some of the slack emanating from China, but said that this is a “micro” view rather than a “macro” view.

He continued: “China is losing competitiveness in light manufacturing due to soaring wage costs. As a result, countries like Vietnam are well placed to pick up market share from China, as is already evident in markets like Bangladesh and Sri Lanka. The Philippines is another country that could benefit from this trend, although infrastructure bottlenecks are slowing progress.”