Summary of Trends in International Trade for October 2020
According to the forecast released by IHS Markit (IHS) on October 15, 2020, the global economy in 2020 will shrink by 4.5%. This figure is 0.3 percentage points higher than the previous (September) forecast. IHS pointed out that COVID-19’s global economic damage has been less than previously expected and global trade is recovering well. Many international economic forecasting agencies believe that the global economic recession in 2020 will not be as severe as previously thought.
In September 2020, Taiwan's Monitoring Indicator continued to show green light. The Leading Indicators and the Coincident Indicators have continued to rise, and the Manufacturing Purchasing Managers Index has expanded for the third consecutive month. Manufacturing production and export orders have all continued to grow thanks to the stocking demand for new consumer electronics products, the steady take up of emerging technology applications, early goods distribution by Chinese businesses ahead of the US ban, the home-bound economy, and the traditional industries in various countries resuming production. Orders have maintained positive growth, and manufacturing purchasing managers' outlook for the next six months has improved for two consecutive months, reflecting a reduction to the pandemic impact. However, trade trends are faced with the uncertainties of a second wave of the pandemic and the unresolved US-China dispute. All these trends deserve continued and close observation.
Our export orders in September 2020 reached US$50.03 billion, representing an increase of 9.9%. The main reasons for this increase are the stocking demand for new consumer electronics products, the continued blossoming of the home-bound and remote economy, and the resumption of traditional industry economic activities, which has led to warming end demand and general continued growth in orders.
In September 2020, Taiwan's foreign trade totaled US$54.29 billion, or an increase of 2.4%. Of this total, Taiwan's exports accounted for US$30.71 billion, or an increase of 9.4%. This has been mainly due to the continued high demand from the remote economy and developments in 5G communication. Meanwhile, imports accounted for US$23.58 billion, or a decline of 5.4%.
Observations on the performance of Taiwan and its major trading partners:
Taiwan's exports to its major trading partners (mainland China, the 10 ASEAN countries, the US, Japan, and the EU) in September showed mixed trends with growths of 15.1% and 14.5% with mainland China and the US, respectively; and declines with Japan, the EU and the ASEAN 10 of 7.6%, 5.7% and 4.1%.
Taiwan's imports from its major trading partners (mainland China, Japan, the ASEAN 10, the EU and the US) in September declined across the board, with the biggest decrease with the ASEAN 10, by 12.4%, followed by the EU by 7.9%, the US by 7.7%, Japan by 1.2% and mainland China, by 0.5%.
In September 2020, exports of electrical equipment and parts (HS85) grew the most, increasing by US$3.14 billion. This was the result of the electronic peak season and a continuation of the home-bound economy.