East Asian countries led economic recovery in last quarter of 2020

Without the resilience of the economies of East Asia and the Pacific, there would have been no global trade recovery at the end of last year, UN analysts said on Wednesday. According to a new report from the agency, exports from East Asia grew about 12% in the last quarter of 2020, while imports increased by around five per cent.

The recovery process has been uneven, with many countries lagging.

Alessandro Nicita, UNCTAD economist

These results followed growth of around three per cent in Chinese exports in the third quarter of the year compared with the same period in 2019, which was “the exception” to an overall downturn in nearly all major economies.

Negative trends the norm

In contrast to the market share gains for China and East Asian economies, most other regions saw continuing “negative trends”, UNCTAD said in its latest Global Trade Update. These included Brazil – whose fourth quarter 2020 goods and services exports were down 4% and 17% respectively – Russia (19%, 34%), India (5%, 8%) and the United States (5%, 26).

By contrast, China saw a 17% boost to exports in goods and a 2% increase in services exports. South Africa also saw a 15% rise in goods shipped abroad (with a 64% drop in services exports) while both Japan and the European Union saw a three per cent increase in goods exports (and a 20% and 14% drop in services exports, respectively).

Generally, trade among countries in the Global South remained “well below average”, except for East Asian economies, UNCTAD said.

Energy and transport trailing

The UN analysts also noted that although most manufacturing sectors recorded positive trade growth in the last quarter of 2020, the main exceptions were the energy and transport sectors, linked to travel restrictions.

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Dropping values in East Asia

In terms of the global trade values, COVID-19 caused a drop of about 9% in 2020, UNCTAD found, with goods commerce down by about 6% and services tumbling more than 16%. The UN agency explained that trade began to rebound in the third and particularly the fourth quarter of 2020, albeit not in services, which stagnated at the level they reached at the end of the third quarter.

Tentative projections for 2021 indicate a slowing recovery in goods exports (1.5 down on the last quarter of 2020) and a further decline in services (of a full 7% compared with the last quarter of 2020), largely because of continued disruptions in the travel sector.

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