General

The World Trade Organization recently released a report stating that global trade in goods remained sluggish in the first quarter of 2023, and this trend may improve in the second quarter. The report believes that international trade export orders have rebounded recently, and the demand for goods has increased in the second quarter of 2023. The previous prediction by the World Trade Organization that global trade in goods will increase by 1.7% in 2023 is expected to be realized.

The United Nations Department of Economic and Social Affairs released a mid year update report on the "World Economic Situation and Prospects 2023" in mid May, predicting that world trade in goods and services will grow by 2.3% in 2023, higher than the forecast at the beginning of the year. However, factors such as the delay of the epidemic, geopolitical tensions, and monetary policy tightening will continue to constrain the growth of world trade.

Looking ahead to the prospects of global international trade, the interviewed experts stated that due to factors such as aggregate and structural factors, global trade is expected to continue to show a weak trend this year, but there will be significant differentiation. Therefore, it is even more necessary for all parties to work together to promote global trade growth.

Weak yet clearly differentiated

The latest issue of the "Goods Trade Barometer" released by the World Trade Organization shows that the global goods trade prosperity index is 95.6, lower than the benchmark of 100, but slightly higher than the 92.2 released in March this year.

Among the various component indices, the automotive product index is 110.8, which continues to remain stable above the trend level; The export order index is 102.7, slightly higher than the trend level; The raw material index is 99.0. In addition, the container transportation index, air freight index, and electronic component index continue to perform weakly, all below trend levels. The report believes that the mixed positive and negative indicators increase the difficulty of predicting short-term trade prospects.

Regarding the prospects of global trade this year, Yang Changyong, a researcher at the Institute of Foreign Economics at the Chinese Academy of Macroeconomics, stated in an interview with reporters that overall, global trade will continue to show a weak trend this year, but there will be significant differentiation.

The aggregate factor and structural factor are the two main factors that affect global trade. "Yang Changyong further analyzed that from the aggregate factor perspective, short-term trade operations are mainly affected by global aggregate demand, which is closely related to global economic growth. According to the prediction of the International Monetary Fund, the World Bank and other international institutions, the world economy will probably continue to be weak this year, with a growth rate of less than 3%, which determines the shortage of global total demand. Therefore, international trade will also be weak this year.

From the perspective of demand structure, global trade will show a more differentiated trend. On the one hand, the demand in developed countries is insufficient. This year, the economic growth rate of developed countries is significantly lower than last year, and although the inflation rate has decreased compared to last year, it is still far above the policy target of 2% and the normal inflation level. Therefore, there will be significant weakness in trade between the United States and Europe. On the other hand, the economic growth of emerging market countries, especially China, is expected to increase. China's foreign trade and trade between countries jointly building the "the Belt and Road" will be the bright colors and important engines in the weak international trade.

In terms of product structure, international trade in traditional bulk goods will still be relatively weak, such as electronic consumer products such as mobile phones, laptops, and computers, as well as trade in some traditional labor-intensive products, which is closely positively correlated with economic growth and people's income levels. The relatively weak container index and air freight index of the World Trade Organization also indicate such a situation. However, products related to green development such as new energy vehicles, photovoltaics, lithium batteries, as well as new industries, formats, and models such as digital trade, will become highlights and important driving forces in international trade due to their compliance with the global trend of green, low-carbon, and environmental protection, and the industry is in an explosive stage with relatively optimistic prospects.

Yang Changyong also said that the Ukrainian crisis was an important factor affecting international trade last year. Since last year, its impact and impact on the supply and demand of commodities have been basically released. As long as there are no new unexpected situations, commodity prices will not soar to a high level this year, as they did at the beginning of last year's crisis, and international trade in commodities will not experience significant fluctuations due to price spikes.

Jointly promote open cooperation

The economic development of various countries benefits from a free, open, and stable trade environment. Currently, global trade is facing multiple uncertain factors, so it is even more necessary for all parties to maintain open cooperation and promote global trade growth from multiple perspectives.

In response, Yang Changyong suggested that first of all, countries should continue to maintain the inclusiveness of macroeconomic policies, promote the achievement of expected economic growth goals, and prevent rapid economic decline or even recession. Developed countries should especially take responsibility. Only with stable economic growth can there be a stable increase in employment and income, which can drive the growth of international trade. Secondly, maintain an open and cooperative attitude, adhere to reducing trade barriers, do not engage in trade protection, and strive to promote win-win cooperation. Thirdly, we should quickly establish international trade rules, including green trade and digital trade, to create a favorable international environment for the vigorous development of these new industries, formats, and models.

WTO Director General Ivira previously stated that trade remains a force in enhancing global economic resilience, but in 2023, trade will face pressure from external factors. Governments of all countries should avoid trade fragmentation and exercise restraint in introducing trade restriction policies.

In addition, Yang Changyong also stated that efforts should be made to promote smooth global logistics, promote effective integration of the global supply chain system, and prevent and reduce the impact and impact of various emergencies on the global logistics and supply chain system.