W. In the first year of the epidemic, China recorded an increase in overseas sales as the only country among the world’s ten largest exporters. Record trade surplus was supported by shifts in global demand imposed by COVID.
The COVID-19 pandemic has clearly disrupted international trade. According to data from the World Trade Organization (WTO), the value of world trade in goods, expressed in US dollars, decreased by 7.5% in 2020. Compared to the previous year. This decrease is a result of the widespread restrictions associated with the spread of the epidemic, as well as a response to the strong increase in uncertainty. Trade volume decreased the most in the second quarter of last year. Then the value of exports exceeded 20 percent. Reduced y / y as much as 94 percent. Of the economies recorded a decline in the value of exports compared to the previous year.
As the epidemiological situation improved, restrictive health rules were removed, and at the same time many advanced economies received a lot of support from fiscal policy. In the second half of 2020, the situation in international trade gradually stabilized, and in the fourth quarter, world trade increased by 2.5%. X p. At the end of 2020, exports increased in most countries of the world (about 60%).
The largest drop in global trade since the 2009 crisis
The collapse of foreign trade in the context of the 2008-2009 crisis
In the whole of 2020, 80%. As for the economies, the value of exports has been found to be lower than in the previous year. The largest drop in exports occurred in highly developed countries, which have been hardest hit by the epidemic, and in countries that are the main fuel exporters. In the latter case, the fall in the value of exports was the result of both lower global demand for energy raw materials and a sharp fall in their prices.
The list of countries that saw an increase in the value of exports in 2020 is relatively short. Forty of the 211 economies included in the World Trade Organization statistics are on the list. In Asia, export growth has been recorded, among others, by China, Vietnam and Taiwan. In Europe, the value of exports increased in Ireland, Switzerland and Poland. In Africa, exports increased, among others in the Democratic Republic of the Congo, Burkina Faso and Guinea. In South America, on the other hand, overseas sales increased in Chile, Guyana and Paraguay.
China is the number one exporter in the world
The largest increase in exports in 2020 in absolute numbers occurred in China. Its value increased, compared to the previous year, by $ 92 billion, or 3.7%. Not a staggering increase, given the dynamics of Chinese exports in previous years. In the years 2001-2019 its value has grown on average at an average rate of 12.9%. annually. However, due to the apparent decline in exports in other countries that were jointly considered (9.2% annually), the disparity between the dynamics of exports from China and the rest of the world was the largest in fifteen years.
Consequently, China has consolidated its position as the largest exporter. The share of the Middle Kingdom in global exports increased to 14.7%. – By 1.6 percentage points compared to 2019. This was the strongest increase in China’s share of global exports so far. Meanwhile, the share of the United States, the second largest exporter, fell from 8.6 percent due to a significant drop in exports. In 2019, it will reach 8.1% in 2020. On the other hand, Germany’s share of global exports did not change in 2020 and remained at 7.8%.
Changes in the global demand structure – favorable to China
The epidemic has shifted the structure of global demand towards personal protective equipment, medical equipment, study and remote work devices, and products related to construction and interior design. These are the product groups in which China consolidated its position as the world leader in exports in previous years. In addition, the marked shift in demand from services to goods has been beneficial to China.
Global value chains after the COVID-19 pandemic
Chinese exporters have also been favored due to the difference in the course of the epidemic in China and other large economies. Ironically, the emergence of the epidemic in China has had a positive effect on that country’s exports. China has managed to contain the spread of the epidemic relatively quickly. So, while most economies have introduced various types of restrictions and restrictions, factories have reopened in China. The significant shortage of personal protective equipment, disinfectants, and medical tools (including thermometers) at the beginning of 2020 led to a significant increase in their production. After the epidemic stopped in China, their production was directed to export.
Ironically, the emergence of the epidemic in China has had a positive effect on that country’s exports.
In China, the largest decline in exports occurred in the first quarter of 2020, when their value decreased by 13.5%, the strongest since 2009. In the second quarter, it began to stabilize, reaching a level similar to that observed in 2019. From the third quarter in the language The Chinese have already had a clear upward trend in exports. Facing the recovery in global trade – In the fourth quarter, the value of Chinese exports increased by 17 percent. X p. It was the strongest increase in Chinese exports since 2013.
More than half of China’s export growth in 2020 ($ 48.4 billion) came from face masks (disposable fabric). The more than eight-fold increase in the export value of this item made masks the fourth most important item in China’s exports in 2020 – after cell phones, walkie-talkies, computers and integrated electronic circuits.
The export of masks was facilitated by a commitment to wearing them in public. Due to the strong increase in demand, many countries have temporarily suspended applicable duties and value-added tax on this item of goods. Imports from China are becoming more desirable as most countries have imposed export bans on products designed to combat the epidemic.
According to Chinese customs data, nearly 80 percent. Chinese mask exports have been directed to developed countries. More than 30 percent ($ 17.6 billion) went to the European Union, and a little less to the United States ($ 15.3 billion). The largest increases in exports occurred in the European economies, which were hit hard in the first wave of the epidemic. The value of exporting masks to Italy and France increased more than twenty times, and to Spain and Germany – fifteen times. In France and Spain, masks were the most important component of imports from China in 2020.
China saves itself, but quietly
In the case of exporting masks, China had almost no competition. Approximately 85 percent of the US imports came from China (the remaining suppliers were Vietnam 4% and Mexico 3%). The share of Chinese exporters in the European Union has been formed at a very similar level. In Japan it is 90%. The value of importing masks came from China.
And other commodity groups in which exports increased were directly or indirectly linked to the epidemic and related restrictions. The growth in computer exports in 2020 turned out to be the largest in the entire decade. The export of integrated electronic circuits was also very dynamic. The export of many items related to interior design was at a historically high standard.
Demand for products related to the epidemic has increased the most in advanced economies. China has increased its exports to the United States and Canada, as well as to the European Union and the United Kingdom. Thus, the growth of Chinese exports was again based on the demand of highly developed countries, in the past three years, exports to developing economies have grown at the fastest possible time.
The demand for pandemic-related products has increased the most in advanced economies.
In 2020, the share of imports from China increased in all major markets. In the U.S. To 22.4 percent, the value of EU imports from China was greater than the combined imports from the United States and the United Kingdom for the first time. In contrast, in Japan, product shipments from China accounted for 25.8 percent. Total imports.
Record surplus
The positive balance of Chinese foreign trade has clearly increased. The difference between the value of exports and imports in 2020 was about $ 2.6 trillion, and thus increased by $ 500 billion. It is the highest positive trade balance among all economies in the world (Germany has the second largest surplus – $ 1.4 trillion). The surplus in sales increased with the United States the most. The drop in fuel prices had a significant effect on the positive balance. The trade deficit with Saudi Arabia and other countries that supply energy resources has decreased dramatically.
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