General

World Trade Trends in 2023! Foreign trade must see!

In 2023, the growth rate of world trade will be slightly lower than the growth rate of global GDP

Global trade in goods (% per annum)

World Trade Trends in 2023! Foreign trade must see! Weak demand in the United States and Europe has lowered expectations, while the situation in Asia is better

Although governments around the world are trying to support demand through large-scale fiscal stimulus plans, the uncertainty surrounding the final energy bill in Europe, the tightening credit environment in the United States, and the weak growth environment in China are not conducive to strong demand.

Consumers are facing economic uncertainty, and a stronger dollar has made cross-border shopping in China more expensive. There are also similarities in the situation in Europe, where consumer confidence has fallen to new lows during the energy crisis.

Although consumer spending in the United States remains relatively good in 2022, we expect a decline in 2023 due to higher interest rates leading to a tighter credit environment and rising unemployment, further depressing demand.

Therefore, it is expected that the growth rate of consumer goods trade will continue to be lower than the average next year. In industry, as Europe is at the center of the energy storm, the decline in new export orders (PMI) also indicates a slowdown in the economy. Orders are still full, but they are decreasing. At the same time, Asia's trade situation may be better next year than other regions, as the region is better able to withstand turbulence.

Facts have proven that intra-Asian trade is very strong, and many companies have shifted their business activities to and diversified Asian regions other than China. Once again, we expect that intra-Asian trade growth will be higher than overall trade growth.

World Trade Trends in 2023! Foreign trade must see! 2. Global energy supply remains tight

The supply of natural gas in the winter of 2023/24 is likely to be more challenging because Russia has very little natural gas flow. Therefore, the construction of inventories next year will become more challenging, leading to a rise in the price of natural gas to 200 euros per megawatt hour. The EU ban on Russian oil will take effect on December 5th, followed by a ban on refined oil products on February 5th, which may lead to a decline in Russian oil supply.

If insurance companies and shipping companies are prohibited from providing transportation of Russian energy products that exceed the agreed ceiling of the Group of Seven, international energy supply will automatically decrease, and the global trade pattern will change. Although other large tanker "flag states" such as Liberia and Panama can participate and assume the main role of transporting Russian oil from Greece, Cyprus, and Malta to various parts of the world, this transition will not be without obstacles.

In addition, China and India remain vigilant about the risk of secondary sanctions, which may limit their appetite for Russian commodities next year.

World Trade Trends in 2023! Foreign trade must see! 3. Persistent labor and material shortages

Due to increased inflation and declining purchasing power, there is a significant risk of strikes and labor negotiations in the transportation sector. This year's strikes in the United States, Britain, Germany, South Africa, South Korea, and other parts of the world have held the transportation industry's breath. The Ukrainian war remains a downside risk.

As we wrote earlier, according to data from the International Chamber of Shipping, 10.5% of all seafarers come from Russia and 4% from Ukraine. With Russia likely to announce a full mobilization, the already persistent shortage of sailors could theoretically worsen. Then, China may implement a new Covid-19 blockade again in 2023. Although restrictions tend to become shorter and more concentrated, activities will still be affected.

Due to the continuous zero COVID-19 policy, port congestion in China has increased significantly this year. Due to difficulties in inland connectivity and the closure of factories in the region, container detention time for imports has soared. This resulted in a backlog of production, resulting in a subsequent wave of export shipments through the port, and affecting global ports and navigation plans.