The impact of the COVID-19 pandemic is bound to affect the economic trade and businesses around the world. As it expands in more than 100 countries, a significant impact on the flow of trade and economy is looming. To note, China and the United States have just come into terms with a trade deal in early January to combat the global effect of the trade war.
Read our latest post about the Trade Deal between U.S. and China: Taking the First Step
Looking back on where it all started, China is still recovering from the cost of the virus spread on its economy. What is the overall impact of the COVID-19 outbreak on China’s domestic economy? Does the pandemic pose a great economic risk as well? Read to gain some useful insights.
Impact on foreign trade in China
For two months since the outbreak of COVID-19 in China, China’s foreign trade showed a significant downward trend. From January to February, there was a sharp decline in China’s total export and import value of traded goods as shown below.
Below shows the volume of export and import for January and February, amounting to the total volume of freight transport.
Source: China Business Intelligence Network
*Year-over-year (YoY) is a method of comparison used to gauge the financial performance on an annual basis. It is often used to analyze growth patterns and trends.
During the epidemic situation in China, imports and exports to the U.S., the E.U., and Japan generally declined. For instance, the total value of traded commodities between China and the U.S. has declined to 19.6 percent year-over-year. Chinese exports to the U.S. in January and February also fell by 26.5 percent YoY, amounting to RMB300.1 billion.
On the other hand, imports and exports to ASEAN grew by 2 percent, amounting to RMB594.11 billion. ASEAN, therefore, became China’s largest trading partner amid the COVID-19 outbreak in the country. Among the 23 major countries that China exports from, only the Philippines, Taiwan and Vietnam saw positive growth in their total export value.
China’s overall imports from five major countries including South Korea, Taiwan, Japan, Australia, and the U.S. showed a negative trend in January 2020. Moreover, imports from Canada also fell to 42.3 percent YoY. China also experienced a drop in imports from South Africa, France, and Hong Kong by more than 20 percent.