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Trade

China powers global trade boom but COVID still looms: WTO

Okonjo-Iweala says access to vaccines will be key to global recovery

New Director-General of the World Trade Organisation Ngozi Okonjo-Iweala, left, walks at the entrance of the WTO. She said Thursday that greater access to coronavirus vaccines, including in emerging countries, will be key to a full global economic recovery.   © AP

TOKYO -- China followed by the rest of Asia has emerged as the leader in global trade amid the coronavirus pandemic, as aggressive stimulus measures around the world fuel demand for exports from the region.

Merchandise exports from Asia are expected to grow roughly 30% by October-December 2022 from where it was in 2015, the World Trade Organization said in its annual trade forecast Wednesday -- significantly outpacing the roughly 10% increase expected for North America and Europe.

The rapid expansion has already become apparent at key ports on the U.S. west coast, like Long Beach, where the gap between import and export container volumes reached a record high in February.

Much of the increased shipments come from China, which is recovering economically from the pandemic ahead of other major economies. The country in 2020 enjoyed a boost from items in high demand among consumers stuck at home, including a 20% increase in laptop exports and a 24% increase in appliances. Exports of textile products, like masks, also rose 30%.

China accounted for a record 15% of global trade by value in 2020, up 1.7 points from the year before, Daiwa Institute of Research estimates. Meanwhile, the U.S. comprised 8.3% and Japan 3.7%.

Imports are greatly outpacing exports at key ports on the U.S. West Coast, such as Long Beach, California.   © Reuters

Still, Japan has also benefited greatly from China's economic boom. Japanese exports to China jumped 18% on the year in the first two months of 2021 due to greater demand for chipmaking equipment, plastic and other necessities for China's manufacturing sector.

The rise has offset Japan's 10% decline in exports to the U.S., which were affected by auto production cuts arising from a global chip shortage. China has consistently ranked at the top of Japan's export destinations since the beginning of the pandemic.

Economic stimulus in the U.S. and Europe has also spurred greater demand for goods from China and other Asian countries. The U.S. on Wednesday announced a new $2 trillion plan to rebuild its infrastructure, which is expected to fuel this heightened demand.

However, it is unclear whether global trade as a whole will continue to recover. The WTO expects an 8% growth in merchandise trade in 2021, but said the figure could slow to 4% in 2022.

"Large monetary and fiscal injections in advanced economies helped prevent a bigger downturn last year," WTO Director-General Ngozi Okonjo-Iweala said at a Wednesday press conference.

"But these support measures will not be enough to bring an end to the crisis," she said, adding that greater access to coronavirus vaccines including in emerging countries will be key to a full global economic recovery.

The U.S.-China trade war looms large over the world as well. U.S. President Joe Biden has maintained a tough stance on China, and growing tensions between the two economic superpowers could complicate a global recovery.

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