Summary of Trends in International Trade for April 2021
According to the forecast released by IHS Markit (IHS) on April 15, 2021, the global economy will grow by 5.3% in 2021. As the distribution of COVID-19 vaccines expands and epidemic prevention and control measures are loosened, the pace of global economic recovery is expected to accelerate in 2021.
In March 2021, Taiwan’s economy continued to show a red signal, while the Leading Indicators and Simultaneous Indicators continued to climb. The Purchasing Managers Index contracted slightly, while manufacturing and export orders continued to increase due to ongoing remote business opportunities and the demand for 5G, high-performance computing, automotive electronics, and other applications which drove a strong demand for information and communication 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. However, the surge of COVID-19 in some countries and persisting international trade frictions will add to these uncertainties, which all deserve continued and close observation.
Taiwan’s export orders in March 2021 amounted to US$53.66 billion, for an increase of US$13.40 billion or 33.3% over the same period in 2020. This was mainly because global economic recovery increased the end market demand. The post-pandemic surge in demand for digitalization by businesses and consumers, coupled with the rise of international raw material markets, drove the overall increase in orders for major products.
In March 2021, the total trade value reached US$68.12 billion, for an increase of 27.0% over the same period last year. Of this, exports totaled US$35.89 billion, for a year-on-year increase of 27.1%, while imports totaled US$32.23 billion, for a year-on-year increase of 27.0%. As the global economy recovered and the rate of vaccine expansion increased, the stay-at-home economy and remote business opportunities continued to flourish. Hence, both exports and imports set new single month record highs for the previous years.
Observations on the trade performance of Taiwan and its major trading partners:
Taiwan's exports in March 2021 to its major trading partners (mainland China, the ASEAN 10, the US, the EU, and Japan) grew significantly. The increase in exports to mainland China was the highest, at 36.3%, followed by exports to the US, at 34.7%, the ASEAN 10, at 24.0%, and the EU, at 16.9%. However, our exports to Japan contracted by 0.3%.
Taiwan's imports from its major trading partners (mainland China, Japan, the EU, the ASEAN 10, and the US) in March 2021 showed mixed performances. Imports from the EU increased the most, at 38.6%, followed by imports from the ASEAN 10, Japan, and mainland China, which increased by 26.6%, 24.1% and 23.8%, respectively. However, imports from the US fell by 2.3%.
In March 2021, exports of electrical machinery equipment and parts (HS85) grew by US$7.65 billion year-on-year for the most outstanding performance. This was attributed to the continued boost in demand for IC, memory and processing units.