Global Trade Recovers Strongly in the Third Quarter of 2021, but the Forecast Remains Uncertain

1.Key concerns

United Nations Conference on Trade and Development (UNCTAD) estimates show that in the third quarter of 2021 world trade continued its strong recovery from the COVID-19 pandemic – albeit unevenly across countries (regions) and sectors. The forecast of global trade remains very uncertain due to the factors involving global inflationary pressures and semiconductor shortage, etc.

The report showed that the value of global trade hits USD 5.6 trillion in the third quarter of 2021, setting a new quarterly record this year. Despite the impact of the COVID-19 pandemic, the strong recovery of global trade was driven by subsiding pandemic restrictions and economic stimulus packages taken by countries (regions). Global trade is expected to reach about USD$28 trillion in 2021, indicating an increase of 23% on 2020, and 11% compared with pre-pandemic levels.

The recovery has been uneven across countries (regions) and sectors, the report says. Compared with trade in goods, the services sector picked up in line with the overall growth, but tourism remains below pre-pandemic levels. Among the manufacturing sectors, trade in energy-related products grow the most, buoyed by increases in the price of fossil fuels, while the trade was more muted in some sectors affected by the global shortage of semiconductors, such as the automotive industry and electronics. In comparison to developed economies, trade flows increase more strongly for developing countries, but economic growth in China in the third quarter was below expectations.   

The forecast of global trade remains very uncertain. The report says that economic stimulus packages taken by countries (regions) against the pandemic may place inflation pressures, negatively impacting global trade. Many economies including those in the EU continue to face COVID-19-related disruptions that could affect consumer demand next year. In addition, the concentration risk of the supply chain and the shortage of semiconductors also negatively affect the trade growth in global manufacturing industries.

2.Briefing on COVID-19 Pandemic（Issue No.171）

According to WHO statistics, calculated numbers of confirmed COVID-19 cases and deaths reached 266,504,411 and 5,268,849 by December 8, 2021. The US, Germany, the UK, French and Russia, were the five countries (regions) with the highest number of new confirmed cases in the past seven days. Russia, the US, India, Ukraine and Poland were the five countries (regions) with the highest number of new deaths in the past seven days.

https://covid19.who.int/

The WHO stressed countries must take measures to tighten their responses to the challenge of the Omicron variant. Statistics from Our World In Data, an online research site of the University of Oxford, presented that 8,276,283,548 doses had been administered by December 7, 2021. The WHO Director-General Tedros Adhanom Ghebreyesus said on December 7 that the Omicron variant has spread to 57 countries (regions). The emergence of the Omicron variant poses more severe challenges to the global COVID-19 fight. Tedros called on countries (regions) to conduct further research on the Omicron variant and take public health measures such as accelerating vaccine coverage and keeping social distancing. He also asked countries (regions) to avoid ineffective and discriminatory travel bans.

https://ourworldindata.org/covid-vaccinations

In terms of the restrictive measures taken by countries (regions), countries (regions) have continued to take restrictions against the Omicron variant. In America, on December 8, Karine Jean-Pierre, the principal deputy press secretary for the White House of the United States called on the American people to get a booster shot of the COVID-19 vaccine as soon as possible. Previously, 20 states in the United States had reported cases of the Omicron variant. Brazilian President Bolsonaro announced on December 7 that unvaccinated travelers will be allowed to enter the country and the decision has caused controversy in Brazil. In Europe, British Prime Minister Johnson announced on December 8 that the UK decided to adopt the telework next week and make it compulsory to show the COVID-19 passport. In France, public hospitals in many places will reactivate the “white plan”, in order to face the pandemic pressure of COVID-19. The “white plan” allows local hospitals to call back the off-duty medical personnel and make special arrangements on medical resources based on the situation of COVID-19 pandemic. In Oceania, the Australian Therapeutic Goods Administration approved for Modena COVID-19 vaccine for citizens over the age of 18 on December 8. Earlier, the state of Queensland reported “first in the world” new version of the Omicron variant. Australia decided to allocate AUD 540 million in response to the COVID-19 pandemic. In Asia, Japan’s government submitted to parliament a draft extra budget for the fiscal year 2021 on December 6 worth a record 36 trillion yen. Under the extra budget, 18.6 trillion yen will be allocated for the measures to withstand the COVID-19 pandemic and support the recovery of the economy, such as purchasing COVID-19 vaccines and subsidizing Japan's “Go To Travel” program.