Global trade resurgence driven by Chinese exports, but reasons remain for caution

Thu 26 Nov 2020
Posted by: William Barns-Graham
Trade News

Global trade is bouncing back thanks to resurgent exports out of Asia, according to Bloomberg’s regular ‘Trade Tracker’.

Trade in goods and services plunged in the spring as the coronavirus pandemic took hold in China, before spreading to Europe and the US.

Asia-Pacific boost

Nine out of the 10 metrics in the Bloomberg Trade Tracker are recording a ‘normal’ status or better.

Interpreting the results, Steve Cochrane from Moody’s Analytics said the rebound was being driven by exports in China.

“China leads Asia’s recovery, and exports lead China’s recovery,” he said.

The first 20 days of November also saw the best reading for Korean exports since February.

Reasons for caution

However, although the Trade Tracker has been buoyant since early September, there are reasons to be cautious.

According to Bloomberg, the resurgence of the virus across Europe and in the US, as well as uncertainty around US-China relations under a Biden administration, still present challenges to global trade.

Export surge

The WTO has also found that trade has begun its recovery from the worst of the pandemic, Reuters report.

Its goods trade barometer has risen to 100.7 points from a record low of 84.5 points in August, driven by a surge in export orders. A reading greater than 100 indicates above-trend growth.