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The World Trade Organization’s report on Global Trade Data and Outlook released by the World Trade Organization said that due to the strong recovery of global trade in the third quarter, the overall performance of global trade this year will be better than previously expected. However, the World Trade Organization economists also informed that in the long run, the prospects for the recovery of global trade are still not optimistic due to uncertainties such as future development of the epidemic. This will bring new challenges to China’s ceramic exports.

Trade performance was significantly better than expected

The “Global Trade Data and Outlook” report shows that the global trade in goods will drop by 9.2% in 2020, and the performance of global trade may be better than expected. The WTO predicted in April this year that global trade will fall by 13% to 32% in 2020.

The WTO explained that this year’s global trade performance was better than expected, partly attributable to the implementation of strong monetary and fiscal policies by many countries to support national and corporate incomes, which led to a rapid rebound in the scale of consumption and imports after the “unblocking” and accelerated economic activity restore.

Data show that in the second quarter of this year, global trade in goods has experienced a historical decline, with a month-on-month drop of 14.3%. However, from June to July, global trade performed strongly, releasing a positive signal of bottoming out and raising expectations for full-year trade performance. The trade scale of epidemic-related products such as medical supplies has grown against the trend, which has partially offset the impact of contraction in trade in other industries. Among them, personal protective equipment experienced “explosive” growth during the epidemic, and its global trade scale increased by 92% in the second quarter.

WHO Chief Economist Robert Koopman said that although the decline in global trade this year is comparable to that of the 2008-2009 international financial crisis, compared to the magnitude of the global gross domestic product (GDP) fluctuations during the two crises, Global trade performance has become more resilient under the epidemic this year. The World Trade Organization predicts that global GDP will decline by 4.8% this year, so the decline in global trade is about twice the decline in global GDP, and the shrinkage in global trade in 2009 is about 6 times that of global GDP.

Different regions and industries

Coleman Lee, a senior economist at the World Trade Organization, told reporters that China’s export scale during the epidemic was higher than expected, while import demand remained stable, which contributed to increasing the scale of intra-regional trade in Asia.

At the same time, under the epidemic, the performance of global trade in various industries is not the same. In the second quarter, the global trade volume of fuels and mining products fell by 38% due to factors such as price plummets and sharp declines in consumption. During the same period, the trade volume of agricultural products as daily necessities fell by only 5%. Within the manufacturing industry, automotive products have been hit hardest by the epidemic. Affected by supply chain paralysis and reduced consumer demand, the total global trade in the second quarter has shrunk by more than half; during the same period, the scale of trade in computers and pharmaceutical products has increased. As one of the necessities of people’s lives, daily-use ceramics are very important for production under epidemic conditions.

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The prospects for recovery are highly uncertain

The WTO warned that due to the future development of the epidemic and the possible anti-epidemic measures implemented by various countries, the prospects for recovery are still highly uncertain. The updated report of “Global Trade Data and Outlook” lowered the growth rate of global trade in 2021 from 21.3% to 7.2%, emphasizing that the scale of trade next year will be much lower than the level before the epidemic.

The updated report of “Global Trade Data and Outlook” believes that in the medium term, whether the global economy can achieve sustained recovery will mainly depend on the performance of future investment and employment, and the performance of both is closely related to corporate confidence. If the epidemic rebounds in the future and the government re-implements the “blockade” measures, corporate confidence will also be shaken.

In the longer term, swelling public debt will also affect global trade and economic growth, and less developed countries may face a heavy debt burden.


Post time: Nov-16-2020