Summary of Trends in International Trade for February 2021
According to forecast released by IHS Markit (IHS) on February 16, 2021, the global economy will grow by 5.0% in 2021. However, under the effects of the COVID-19 pandemic in 2021, the pace of recovery will vary from place to place.
In January 2021, the domestic economy continued to show a yellow-red signal, while the Leading Indicators and Simultaneous Indicators continued to climb, and the Purchasing Managers Index expanded for the seventh consecutive month. Manufacturing and export orders continued to grow due to the continuation of remote business opportunities and the increasing demand for 5G, high-performance computing, and automotive electronics, which drove a strong demand for technology products. At the same time, the outlook of manufacturing and purchasing managers for the next six months will see the fastest rate of expansion since the index’s creation in July 2012. This indicates that many countries have begun to implement vaccinations and the global economy is gradually recovering. However, the persisting COVID-19 pandemic and the unresolved U.S.-China trade friction will add to these uncertainties, which all deserve continued and close observation.
Taiwan’s export orders in January 2021 amounted to US$52.72 billion, for an increase of US$17.41 billion or 49.3% compared to the same period in 2020. This was mainly due to the continuation of increasing demand via the remote economy. The increasing demand for applications, such as 5G, high-performance computing, automotive electronics, etc. drove strong demand for technological goods. In addition, since the Lunar New Year coincided with the same month last year, the base comparison was relatively low and some customers placed orders in advance of the Lunar New Year. Thus, orders for major goods showed double-digit growth.
In January 2021, the total trade value reached US$62.36 billion, for a significant increase of 33.6% over the same period last year. Of this, exports totaled US$34.28 billion, for a year-on-year increase of 36.8%, while imports totaled US$28.08 billion, for a year-on-year increase of 29.9%. These high rates of increased imports and exports was mainly because the Lunar New Year holiday coincided with the same period last year, so the base comparison was relatively low.
Observations on the performances of Taiwan and its major trading partners:
In January 2021, Taiwan's exports to its major trading partners (mainland China, the ASEAN 10, Japan, the U.S. and the EU) grew significantly. The increase in trade with mainland China and the ASEAN 10 was the highest at 50.9% and 40.7%, respectively. Comparatively, exports to the U.S., Japan and the EU, rose 31.9%, 21.6% and 17.6%, respectively.
In the same period, Taiwan's imports from its major trading partners (mainland China, the ASEAN 10, Japan, the U.S. and the EU) also rose significantly. Imports from mainland China at 45.4% showed the most marked increase, followed by imports from Japan, the EU, the ASEAN 10 and the U.S., which increased by 36.5%, 25.8%, 25.6% and 16.2%, respectively.
In January 2021, exports of electrical machinery equipment and parts (HS85) grew by US$5.35 billion annually for the most outstanding performance. This was attributed to the continued boom in demand for emerging technology applications, such as 5G communications, remote business opportunities, high-performance computing, and automotive electronics.