Summary of Trends in International Trade for November 2021

2021-11-30

According to the forecast released by IHS Markit (IHS) on November 15, 2021, the global economy will grow by 5.5% in 2021. Due to affected by the ebbs and flows of the epidemic, the global economic expansion is unevenly progressing around the world. The dampening effects of regional outbreaks on economic activity are then transmitted globally through trading relationships.

In October 2021, Taiwan’s economy continued to show a red signal and the Purchasing Managers Index and the Coincident Indicators continued to expand. While manufacturing and export orders continued to increase due to the steady recovery of the global economy, the warming terminal demand, and the emerging technology applications continued to be promoted, which driving the demand for technology applications and traditional industrial products increased. Also, the Leading Indicators has turned to increase, and the outlook for manufacturing and purchasing managers over the next six month signals expansion, which means that the epidemic impact to domestic economy has been slowed down. However, the risk of the spread of the variant virus epidemic and the existence of supply chain shortage, coupled with trade and technological disputes may continue, which deserve close observation on follow-up developments.

Taiwan’s export orders in October 2021 amounted to US$59.10 billion, for an increase of US$7.51 billion or 14.6% over the same period in 2020. This was mainly because of the high demand for digitalization from corporate and individuals, the continued increase in demand for emerging technology applications, as well as the continued high prices level in international raw materials markets, and the steady momentum for final demand products, which drove the increase in orders for technological application products and traditional industrial products.

In October 2021, total trade value reached US$74.16 billion, for an increase of 30.1% over the same period last year. Of this, exports totaled US$40.14 billion, for a year-on-year increase of 24.6%, while imports totaled US$34.02 billion, for a year-on-year increase of 37.2%. Given the drive for the emerging technology applications and digital transformation business opportunities, Taiwan's exports reached the highest scale in a single month compared to past year.

Observations on the trade performance of Taiwan and its major trading partners:

Taiwan's exports in October 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 EU was the highest, at 49.8%, followed by exports to the US, the ASEAN, Japan and mainland China, by 29.4%, 24.7%, 23.1% and 9.2%, respectively.

Taiwan's imports from its major trading partners (mainland China, Japan, the EU, the ASEAN 10, and the US) in October 2021 were driven by the increasing in high derived demand for exports of semiconductors and automation equipment, and the continued high price level in international raw material. The highest increases in imports came from the ASEAN 10 at 38.6%, followed by imports from mainland China, the EU, Japan, and the U.S. which increased by 30.3%, 25.9%, 17.2% and 11.6%, respectively.

Of the top 10 exports in October 2021, electrical machinery equipment and parts (HS85) grew by US$2.07 billion year-on-year for the most outstanding performance. In addition, the growth rate of fossil fuels (HS27) and iron and steel (HS72) increased with 3 digits in orders, which is mainly due to the rising demand for internationally-traditional industrial products and the price of raw material market.

CTR:205