A glance at the global economy under COVID-19 pandemic 新冠疫情下的全球经济略览资料文件与下载

A glance at the global economy under COVID-19 pandemic

新冠疫情下的全球经济略览

在2019年末和2020年，新冠疫情给全球经济带来了重创。根据世界贸易组织、世界银行和联合国贸易与发展会议的数据统计，全球的货物、服务和对外投资都出现了大幅度下滑。中国经济也受到的影响。 但是在中国共产党的领导下，全国人民齐心奋战，GDP和货物贸易都有增长。

As we know that globalization refers to the shift toward a more integrated and interdependent world economy. However, the COVID-19 pandemic has given a heavy blow to an already weak global economy, which is expected to slide into its deepest recession since World War II.  

Figure 1. World merchandise trade volume, 2015Q1 – 2019Q4

(Volume index 2015=100 and year-on-year percentage change)

                                     Source: World Trade Statistical Review 2020, p.19

Global merchandise trade volume peaked in the third quarter of 2018 before stalling for several months and turning down in the fourth quarter of 2019. Seasonally-adjusted merchandise trade volume was down by 1.0 per cent in the fourth quarter of 2019. The long-running trade dispute between the United States and China led to the raising of tariffs and contributed to trade policy uncertainty in 2019. Other factors contributing to economic uncertainty included the government shutdown in the United States in 2018-19, the United Kingdom’s departure from the European Union, and changes in monetary policy in major economies.

Figure 2. Merchandise exports of selected leading traders, April 2020

(Year-on-year percentage change)

Source: World Trade Statistical Review 2020, p.30

Figure 2 shows that merchandise exports were down sharply in most economies in April 2020 compared with the previous year. Declines in merchandise exports of selected leading traders in April 2020 (year-on-year change) ranged from -2 per cent (Chinese Taipei) to -61 per cent (South Africa). Although certain Asian economies avoided declines in exports (in April 2020), their import growth remained negative. For example, imports of China and Thailand were down 14 per cent and 17 per cent, respectively, in April 2020.

Figure 3 illustrated that services are hit hard by the COVID-19 outbreak. Unlike goods, services cannot be produced, stored and sold at a later stage. Export revenues lost for canceled flights, restaurant meals or hotel bookings are lost permanently and cannot be recovered.

Figure 3. Services exports of selected leading traders, March 2020

(Monthly percentage change, year-on-year)

               Source: World Trade Statistical Review 2020, p.31

   International travel, for personal or business reasons, air transport, and cultural, sporting and recreational activities are all linked. They account for more than 40 per cent of world services exports.These services have been directly affected by the COVID-19 pandemic due to travel restrictions at home and in the host countries for these activities, making it impossible for people to move, consume or supply services.  Growth remained positive in countries where exports are dominated by IT services.

From figure 4 we can see that the COVID-19 crisis caused a dramatic drop in foreign direct investment and will cause a further deterioration in 2021. Global FDI is projected to decrease by a further 5 to 10 per cent in 2021. The expected level of global FDI flows in 2021 would represent a 60 per cent decline since 2015, from $2 trillion to less than $900 billion. The outlook beyond 2021 is highly uncertain. A U-shaped trajectory, with a recovery of FDI to its pre-crisis trend line before 2022, is possible but only at the upper bound of the expectations.

Figure 4. Global FDI inflows, 2015–2019 and 2020–2022 forecast

(Trillions of dollars)

                                                           Source: World Investment Report 2020, p.2

    China’s economy had greatly impacted by COVID-19 pandemic in 2020. However, under the leadership of Chinese Communist Party, all the people in the country made great endeavor and gained the hard-won achievements. According to the report by China Daily, in 2020, GDP reached 101.6 trillion yuan with GDP growth on a yearly basis 2.3% and foreign trade in goods reached 32.16 trillion yuan, up 1.9%. 

Despite the impact of the COVID-19 pandemic and uncertainties in other parts of the world, China's foreign trade amounted to 5.44 trillion yuan ($834.49 billion) in the first two months of 2021, up 32.2 percent year-on-year. According to UNCTAD, during the COVID-19 pandemic China was able to capture markets share in many sectors including in some of the most negatively affected sectors (transport equipment and road vehicles).  

Figure 5. China and East Asian economies gained market share during COVID

                                                  Source: Global Trade Update, January 2021, p.2

 The World Bank expressed its outlook for the future of global economy under COVID-19 pandemic in the report of Supporting Countries in Unprecedented Times: Global Economic Prospects: Slow growth, policy challenges. The pandemic will likely leave lasting scars on the global economy by undermining consumer and investor confidence, human capital, and global value chains.

References:

1. World Trade Statistical Review 2020, the World Trade Organization

2. World Investment Report 2020, UNCTAD

3. Global Trade Update, January 2021, UNCTAD

4. http://www.chinadaily.com.cn/a/202103/03/WS603ebec0a31024ad0baac406.html accessed at March 3, 2021

5. https://www.chinadaily.com.cn/a/202103/07/WS60444777a31024ad0baad511.html Updated: 2021-03-07