Summary of Trends in International Trade for December 2020
Forecast released by IHS Markit (IHS) on December 15, 2020 shows that COVID-19 has sustained wide-reaching impact on economic activities this year. IHS estimates that the global economy will contract by 4.0% over 2020, and predicts it to rebound to 4.5% growth in 2021.
In November 2020, the domestic economy continued to signal green light. The Leading Indicators and the Simultaneous Indicators continued to rise, and the Purchasing Managers Index expanded for the fifth consecutive month. Manufacturing and export orders have all continued to grow thanks to the successive launch of new consumer electronic products and strong demand for applications of 5G and high-performance computing, which drove foundry production to full capacity. At the same time, manufacturing purchasing managers' outlook point to a period of fastest expansion since February 2020 in the next six months, indicating that the pandemic's impact is well on its way to recovery. However, trade is now faced with uncertainties of a second outbreak as well as the unresolved US-China dispute. All these trends deserve continued and close observation.
Our export orders in November 2020 reached US$57.78 billion, representing an increase of 29.7%. The main reasons for this increase are the delayed launch of smartphones by many international brands, coupled with the continued active demand for remote application equipment, which have led to a clear growth in technology product orders. For traditional products, rising international raw material prices and increasing market demand have been reflected in positive growth in orders.
In November 2020, Taiwan's foreign trade totaled US$58.71 billion, or an increase of 11.1%. Of this total, Taiwan's exports accounted for US$31.99 billion, or an increase of 12.0%. Meanwhile, imports accounted for US$26.72 billion, or an increase of 10.0%.
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) year-on-year grew by double digits for goods to the United States, mainland China and the ASEAN 10, at 17.7%, 17.2% and 10.7%, respectively. Exports to the EU grew by 7.4% yoy. Japan was the only country to which our exports contracted, by 2.3%.
Taiwan's imports from its major trading partners (mainland China, Japan, the ASEAN 10, the EU and the US) in November saw the biggest year-on-year increase with mainland China climbing by 35.7%, followed by the ASEAN 10, by 7.9%, the EU by 6.3%, and Japan by 1.6%. Only the US sustained a decline of 8.0%.
In November 2020, exports of electrical machinery equipment and parts (HS85) grew the most, by US$2.65 billion. This can be attributed to the continuation of opportunities from the remote economy and the end of year peak season, which drove exports to double-digit growth for the second consecutive month.