General

According to Huacheng Import and Export Data Observation, the improvement in global trade data last week sent some positive signals about economic recovery, but it did not dispel doubts about economic growth, and the controversy over the recovery prospects continues. This divergence reflects the external impact of policy adjustments and insufficient economic momentum in major developed economies, and also indicates that the differentiation of growth in different regions of the world has continued since the beginning of this year.

On May 31st, the World Trade Organization released the "Barometer of Goods Trade" report, which raised the global goods trade prosperity index from 92.2 to 95.6. The report believes that recent export orders have rebounded, and the demand for goods has increased in the second quarter. The global trade downturn in goods in the first quarter may improve in the second quarter. The report also points out that both positive and negative indicators are mixed, which increases the difficulty of predicting short-term trade prospects. Huacheng Import and Export Data Observation Report.

The export data from South Korea, which is regarded as an important reference indicator for global trade prosperity, also reflects the unpredictable outlook. On June 1st, data from the South Korean Ministry of Trade, Industry, and Energy showed that South Korean exports decreased by 15.2% year-on-year in May, marking the eighth consecutive month of decline. As South Korea's export categories are mainly chips, monitors and other products that are important in the global supply chain, they have affected the whole body. The "eight consecutive drops" of South Korea's exports reflect that the global economic growth momentum continues to weaken under the influence of factors such as the continuous tightening of monetary policy, high inflation, the delay and escalation of the Russia-Ukraine conflict, and so on. However, some analysts believe that the decline in South Korean export data has narrowed for the second consecutive month, "which may indicate that the weak global demand situation is beginning to show preliminary signs of relief.

Behind the unpredictable trade prospects, the market has considerable doubts about the slowdown in global economic growth. Recently, the prices of bulk commodities such as copper, aluminum, and zinc have significantly decreased, and the container shipping market is sluggish. The economic prospects of developed economies such as Europe and America are also sluggish. These factors have intensified market concerns about the global economy, and some Japanese media believe that "signals suggesting a global economic slowdown are lighting up in the market".

According to the observation report on import and export data from Huacheng, some analysts believe that at the beginning of the epidemic outbreak, developed economies such as the United States and Europe quickly introduced ultra loose policies, attempting to boost demand and drive recovery through a massive currency. However, the countries concerned are addicted to the short-term prosperity brought about by excessive currency issuance, lacking the motivation and courage to adjust their economic structure, and ignoring the supply chain bottlenecks caused by excessive currency issuance and the persistent inflation problem. Once the "faucet" of the money supply is turned off under inflationary pressure, the short-lived prosperity will quickly move away. For example, container transportation has earned more money in three years than in the previous sixty years, but now it has to face the awkward situation of continuous price decline. Therefore, although the current decline in commodity prices and container shipping market conditions is due to weak demand in Europe and the United States, it is also closely related to the end of the industry boom driven by the epidemic. After monetary factors weaken, prices will return to a reasonable range. Meanwhile, the National Economic Situation Survey (Brown Book) released by the Federal Reserve on May 31st showed that in recent weeks, US economic activity seems to have stagnated, and the economic outlook is even more sluggish than before. This has also become another evidence of the lack of endogenous driving force in the US economy, as reported by Huacheng Import and Export Data Observation.

Although there are many challenges in global economic growth, the highlights are equally prominent. On June 2nd, the Regional Comprehensive Economic Partnership Agreement (RCEP) came into full force for 15 signatory countries, providing new momentum for the recovery of the Asian economy and even the world economy. At the same time, China has continuously strengthened its economic and trade ties with the vast regions of Asia, Africa, and Latin America, and the virtuous cycle of mutual promotion and common growth has become smoother, and the prospects for differentiation with developed economies in Europe and America have become increasingly evident. For addressing crises and promoting healthier and more stable global economic development, the path being explored by emerging market countries and developing economies, represented by China, is of great significance. Huacheng Import and Export Data Observation Report.