Summary of Trends in International Trade for March 2021
According to forecast released by IHS Markit (IHS) on March 16, 2021, the global economy will grow by 5.1% in 2021. As vaccine distribution for COVID-19 expands while distribution blockades gradually decrease, the global economy is expected to recover steadily in 2021.
In February 2021, Taiwan’s economy shifted to a red signal, the Leading Indicators and Simultaneous Indicators continued to climb, and the Purchasing Managers Index expanded for the eighth consecutive month. Manufacturing and export orders continued to increase due to the continuation of remote business opportunities and growing demand for a stay-at-home economy and emerging technological applications, which in turn drove a strong demand for technology products. Meanwhile, 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 international trade frictions will add to these uncertainties, which all deserve continued and close observation.
Taiwan’s export orders in February 2021 amounted to US$42.59 billion, for an increase of US$13.92 billion or 48.5% over the same period in 2020. This was mainly because the COVID-19 pandemic in 2020 had a relatively low comparison base, while the global economy now is gradually recovering. The rising demand for a remote economy, home economy, and emerging technological applications drove a strong demand for technological goods. In addition, prices rose for raw materials in the international market, stimulated by the continued increase in orders for traditional goods.
In February 2021, the total trade value reached US$51.07 billion, for an increase of 7.8% over the same period last year. Of this, exports totaled US$27.79 billion, for a year-on-year increase of 9.7%, while imports totaled US$23.28 billion, for a year-on-year increase of 5.7%. Although this coincides with the Lunar New Year holiday, the continued boom in exports of electronic components and the recovery of production of traditional goods offset the impact of fewer working days.
Observations on the trade performance of Taiwan and its major trading partners:
Taiwan's exports in February 2021 to its major trading partners (mainland China, the ASEAN 10, the US, the EU, and Japan) grew across the board. The increase in exports with the US was the highest, at 14.8%, followed by exports to mainland China, at 12.5%. Exports to the EU, the ASEAN 10, and Japan rose by 10.8%, 4.2% and 0.5%, respectively.
Taiwan's imports from its major trading partners (mainland China, Japan, the EU, the ASEAN 10, and the US) in February 2021 showed mixed performances. Imports from mainland China increased the most at 39.0%, followed by imports from the EU, which increased by 30.2%, while imports from the ASEAN 10 remained the same as last year. However, imports from the US fell the most significantly by 11.3%, which was followed by a decrease in imports from Japan at 4.7%.
In February 2021, exports of electrical machinery equipment and parts (HS85) grew by US$1.54 billion year-on-year for the most outstanding performance. This was attributed to the continued surge in demand for emerging technological applications, such as 5G communications, high-performance computing, automotive electronics, and the stay-at-home economy.