Global trade in goods and services rose 10 per cent in the first quarter from a year earlier

The latest report of the United Nations Conference on Trade and Development (UNCTAD) shows that global trade recovered strongly in the first quarter of this year, with trade volume not only significantly higher than that of the same period last year, but also higher than that of the same period in 2019. Experts say global trade will continue to recover steadily, thanks to the stimulus policies of major economies and strong demand for anti-epidemic products. In particular, China's import and export trade has shown resilience during the epidemic prevention and control period, becoming an important engine for the steady development of global trade.

The latest update report on global trade released by the United Nations Conference on Trade and Development (UNCTAD) shows that in the first quarter of this year, global trade in goods and services grew by 4% month-on-month and 10% year-on-year, with strong growth in trade in goods and trade in services still lower than the pre-epidemic level. The report forecasts that global trade will reach $6.6tn in the second quarter, 31 per cent higher than last year's low, and that global trade will grow 16 per cent year on year for the full year. Experts believe that global trade will continue to grow steadily this year, but faces some uncertainties.

The overall performance of trade was stronger than expected

UNCTAD economist Alessandro Nicita, who helped draft the report, said global trade was basically at pre-epidemic levels in the fourth quarter of last year, and in the first quarter of this year, global trade was 3 percent higher than in the fourth quarter of 2019.

To put this in perspective, trade between the world's major economies began to recover in the autumn of 2020. However, due to the impact of the epidemic, global trade recovered quickly from a low base last year. However, the trade volume of some major economies is still below the level of 2019. China, India and South Africa performed relatively better than other major economies in the first quarter of 2021.

Regionally, most economies saw growth in trade imports, but exports were mainly driven by East Asia, highlighting the important role of East Asia in global trade. The trade growth of developing countries is faster than that of developed countries, especially South-South trade. In the first quarter of this year, imports and exports of developing countries grew by 18% and 22%, respectively, and those of developed countries by 12% and 7%. South-South trade increased by 20% year on year and 17% from the first quarter of 2019.

In terms of product categories, the demand for ore products, office equipment and communication equipment continued to rebound, with year-on-year growth of 42%, 38% and 37% in the first quarter, respectively. The trade volume of these products also showed a relatively high growth compared with the first quarter of 2019. In addition, trade in machinery and equipment, clothing and medical products also grew rapidly.

In many countries, sales of laptops and other electronic gadgets are booming as home-quarantine policies allow employees to work from home and students to attend classes remotely. In Europe, where public transport is limited, demand for short trips has risen and bicycle sales have multiplied.

Multiple factors have helped trade rebound

According to UNCTAD, the continued growth of global trade depends on the reduction of trade restrictions, positive trends in commodity prices, and a certain degree of macroeconomic and financial support. But global trade still faces some uncertainties. For some time to come, the trend of uneven recovery in global trade will continue. Trade growth in East Asia and developing countries will remain strong, while some countries' trade is lagging behind the global average.

Oskar Genea, senior economist at the European Center for International Political Economy, told our reporter that there are many reasons for the positive recovery in global trade. First, the world's major economies are gradually on the track of recovery, driving a strong recovery of global trade. Second, the global supply chain and value chain as a whole have withstood the test of the epidemic, providing greater support to trade flows between countries in the current and post-epidemic period. Finally, during the epidemic prevention and control period, the global demand for anti-epidemic materials continues to increase, and the demand for electronic products, home and office supplies is strong.

The International Monetary Fund believes that financial support from major economies and accelerated vaccination will help promote world economic recovery. Since the second half of last year, durable goods consumption in developed countries has picked up, supply chains in emerging markets have recovered, and international trade has continued to recover.

UNCTAD noted that the outbreak has brought uncertainty to the global value chain, causing some segments to shrink and bringing production closer to the consumer market. In addition, political factors and challenges to the international multilateral trade regime may also pose risks that limit trade growth.

China continues to be an engine of global growth

The United Nations Conference on Trade and Development (UNCTAD) believes that the overall performance of global trade in 2020 is relatively good, showing resilience, mainly thanks to the East Asian economies, especially China, taking the lead in controlling the epidemic, rapidly resuming work and production, and meeting the huge demand for global anti-epidemic supplies. It is expected that the performance of East Asian trade will continue to improve. In 2020, China's share in global trade will further increase. In 2021, China will continue to be a major driver of global growth, benefiting countries with close trade ties with China.

In the first four months of this year, China's imports and exports of goods totaled 11.62 trillion yuan, up 28.5 percent from the same period last year, according to China's General Administration of Customs. As China's top four trading partners, ASEAN, the European Union, the United States and Japan saw their total trade with China grow by 27.6 percent, 32.1 percent, 50.3 percent and 16.2 percent, respectively. In the same period, China's total imports and exports to countries along the "One Belt And One Road" increased by 24.8%.

Demand from China offers a lot of opportunities for ASEAN countries. In the first quarter of this year, China's import and export volume to Thailand increased 28.7% year on year, according to the General Administration of Customs of China. Bilateral trade between China and Thailand showed a rapid growth trend. Cai Wei-chai, senior vice president of Kai Thai Bank, said that the strong performance of China's import and export trade once again proves that the Chinese economy is a powerful driving force driving the world economy forward and highlights China's important position in the global supply chain. The booming trade between Thailand and China, as well as between ASEAN and China, will further promote regional economic recovery.

China overtook Germany to become the largest source of imports to the UK in the first quarter of 2021, according to new figures released by the Office for National Statistics. Influenced by the epidemic and other factors, the UK has increased demand for anti-epidemic items and electronic products, which has boosted its import trade from China. In 2020, China surpassed the United States for the first time to become the European Union's largest trading partner. Among the EU's top 10 trading partners in goods, China is the only country that has achieved two-way growth in trade.

The United Nations Conference on Trade and Development economists Nikita and Carlos Lazo note that China's export trade has shown great resilience and continued to grow in importance to global production. The epidemic has further highlighted China's important role in global trade, and its strong resilience has enabled China's exports to recover quickly.