Summary of Trends in International Trade for June 2021
According to the forecast released by IHS Markit (IHS) on June 17, 2021, the global economy will grow by 6.0% in 2021. Although the global economy is recovering rapidly, COVID-19 still threatens areas where vaccinations are not yet prevalent, and global supply chains continue to be affected.
In May 2021, Taiwan’s economy continued to show a red signal. Although the Leading Indicators fell slightly, the Coincident Indicators continued to climb. Moreover, the Purchasing Managers Index fell slightly, while manufacturing and export orders continued to increase due to the steady recovery of the global economy from the rise of terminal market demand along with the continued demand for emerging technology applications and ongoing remote business opportunities which continued to drive a strong demand for ICT and electronic products. However, the outlook for manufacturing and purchasing managers over the next six months shows a sign of decline as the COVID-19 pandemic is heating up domestically, which may restrict momentum in consumption and deserve close observation.
Taiwan’s export orders in May 2021 amounted to US$52.29 billion, for an increase of US$13.40 billion or 34.5% over the same period in 2020. This was mainly because global economic recovery spurred the demand for digitalization by businesses and consumers, coupled with a rebound of terminal market demand and a rise of international raw material markets, which drove the overall increase in orders for major products.
In May 2021, the total trade value reached US$68.67 billion, for an increase of 39.6% over the same period last year. Of this, exports totaled US$37.41 billion, for a year-on-year increase of 38.6%, while imports totaled US$31.26 billion, for a year-on-year increase of 40.9%. As the global economy recovered due to the growing demands by the stay-at-home economy and emerging technological applications, both exports and imports have grown significantly.
Observations on the trade performance of Taiwan and its major trading partners:
Taiwan's exports in May 2021 to its major trading partners (mainland China, the ASEAN 10, the US, the EU, and Japan) grew significantly. The increase in exports to the EU and the ASEAN 10 were the 2 highest, at 55.5% and 54.7%, respectively. Followed by exports to the US at 27.3%, mainland China at 26.3%, and Japan at 19.0%.
Taiwan's imports from its major trading partners (mainland China, Japan, the EU, the ASEAN 10, and the US) in May 2021 were driven by export demand, which showed the 2 highest increases from the US at 44.4% and the EU at 43.0%, followed by imports from the ASEAN 10, mainland China and Japan, which increased by 36.1%, 31.3% and 26.5%, respectively.
Of the top 10 exports in May 2021, mineral fuels, mineral oils and products of their distillation (HS27) grew by 186.4% year-on-year for the most outstanding performance. Both diesel and gasoline exports showed multiple growth. This was attributed to the rebound of international oil prices from a low point, as well as improvement in the US and EU economies, which drove an increase in related demand.