Summary of Trends in International Trade for July 2021
According to the forecast released by IHS Markit (IHS) on July 15, 2021, the global economy will grow by 5.8% in 2021. Although the global economy has continued to recover, the threat posed by Covid’s Delta variant has increased, especially in regions where the vaccination process is relatively lagging, which may delay the time frame for global supply chains to return to normal.
In June 2021, Taiwan’s economy continued to show a red signal while the Coincident Indicators continued to fall for three consecutive months and the Purchasing Managers Index continued to fall slightly. However, manufacturing and export orders continued to increase due to the steady recovery of the global economy and the terminal demand, coupled with the continued demand for emerging technology applications and ongoing remote business opportunities, which boosted double-digit growth of various medium-sized industries. However, the Leading Indicators continued to fall slightly and the outlook for manufacturing and purchasing managers over the next six months may also signal decline, which deserves continued and close observation.
Taiwan’s export orders in June 2021 amounted to US$53.73 billion, for an increase of US$12.73 billion or 31.1% over the same period in 2020. This was mainly because global economic recovery spurred the demand for traditional industrial products by businesses and consumers, coupled with a rebound of technology application products and a high price level in international raw material markets, which drove the overall increase in orders for major products.
In June 2021, total trade value reached US$68.16 billion, for an increase of 38.4% over the same period last year. Of this, exports totaled US$36.65 billion, for a year-on-year increase of 35.1%, while imports totaled US$31.51 billion, for a year-on-year increase of 42.3%. As the gradual lifting of barriers globally drove the demand for growth, and business opportunities of emerging technology applications continued to heat up, the scale of Taiwan's imports and exports reached its second-highest in a single month compared to the past year.
Observations on the trade performance of Taiwan and its major trading partners:
Taiwan's exports in June 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 to the ASEAN 10 was the highest, at 40.9%, followed by exports to the EU, at 39.3%. Exports to mainland China, the US and Japan rose by 37.8%, 34.5% and 23.9%, respectively.
Taiwan's imports from its major trading partners (mainland China, Japan, the EU, the ASEAN 10, and the US) in June 2021 were driven by export demand. The highest increases in imports came from the EU at 54.1%, followed by imports from the ASEAN 10, the US, mainland China and Japan, which increased by 36.7%, 35.8%, 31.4% and 24.3%, respectively.
Of the top 10 exports in June 2021, electrical machinery equipment and parts (HS85) grew by US$4.23 billion year-on-year for the most outstanding performance. This was attributed to the continued surge in demand from remote business opportunities, which drove the demand for IC, as well as memory and processing units.