On May 19, the United Nations Conference on Trade and Development (UNCTAD) released the latest update report on global trade, showing that global trade recovered strongly from the COVID-19 crisis and reached a record high in the first quarter of 2021, with a year-on-year growth of 10% and a quarter-on-quarter growth of 4%. Much of the current rebound in global trade continues to be driven by trade in goods, while trade in services continues to lag.

The current rebound in global trade is expected to continue through the second quarter of 2021, when the total value of global trade in goods and services is expected to reach $6.6 trillion, an increase of about 31 percent from the 2020 nadir and about 3 percent from the pre-epidemic level in 2019, the report said. Global trade is expected to remain strong in the second half of 2021 and grow by about 16% for the whole year from its 2020 nadir, with trade in goods up 19% and trade in services up 8%. Fiscal stimulus packages, especially in developed countries, are expected to strongly support the recovery in global trade throughout 2021. Trade growth in East Asia and developed countries will continue to be strong. The value of world trade will rise correspondingly, driven by the upward trend in commodity prices. In addition, the positive outlook for global trade in 2021 depends to a large extent on further reductions in containment measures, continued upward trends in commodity prices, overall restrictions on protectionist trade policies, and macroeconomic conditions and fiscal conditions in countries that support economic and trade recovery. Overall, the global trade pattern is still uncertain.

Trade trends of major economies show that their trade began to recover in the autumn of 2020 and continued through the first quarter of 2021, but the main reason for this substantial growth is the low base in 2020. Trade in many major economies is still below the 2019 average. Trade in goods among major economies has recovered more strongly than trade in services, which is a common feature of trade trends in all major economies. China, India and South Africa performed relatively better than other major economies in the first quarter of 2021. In particular, China's exports are not only higher than the 2020 average, but also showing strong growth momentum above pre-epidemic levels. In contrast, Russia's exports are still well below the 2019 average.

In terms of regional trade trends, overall, trade in developing countries continued to rebound more strongly in the first quarter of 2021 than in developed countries. Compared to the first quarter of 2020 and the first quarter of 2019, the value of developing countries' merchandise imports and exports increased significantly, by about 16 percent. The importance of East Asian economies' trade in facilitating the recovery of trade in developing countries, namely South-South trade, is even more evident. Of all regions, only East Asia and the Pacific economies showed a strong rebound in exports, while exports from the transition economies, South Asia and Africa remained below average, and exports from South America grew relative to the first quarter of 2020 but remained below the 2019 average.

In terms of industry trade trends, most sectors of global trade showed recovery momentum in the first quarter of 2021, with COVID-19 related sectors such as pharmaceuticals, communications and office equipment continuing to rebound, and other sectors such as minerals and agri-food also showing growth. In contrast, the energy sector continues to lag behind and international trade in transport equipment remains well below average.

The report points out the following trends in global trade in 2021:

First, the pace of global economic and trade recovery is uneven, with some economies rebounding more strongly and faster than others. The economic recovery in China and the United States is expected to be a major driver of global growth in 2021, especially with a positive impact on countries with high trade integration with China, such as East Asian countries, Canada and Mexico. The resilience of global trade is largely due to the early success of East Asian economies in mitigating the epidemic and the faster rebound in trade thanks to strong global demand for COVID-19-related products. In other developing countries, the recovery in trade has been slower. Trade has generally improved in developed countries. COVID-19 is expected to continue to disrupt economic and trade recovery in many developing countries at least through 2021.

Second, the operation mode of GVCs may evolve further. The COVID-19 outbreak has brought uncertainty to the operation of many global value chains and provided an incentive for companies to segment their markets and shift production activities closer to consumers. Regional trade agreements, such as "regional comprehensive economic partnership agreement" (RCEP) and "the continent free trade agreement" (AfCFTA) of sustainable development and implementation and ongoing trade tensions between major economies, as well as the continuing shortage of container and factors such as higher freight, may also lead to global value chain production mode to evolve further.

Third, the relevant policies and interventions of governments will continue to affect international trade and the post-epidemic economic and trade recovery process. Diplomatic frictions among some major economies and the current difficulties facing the multilateral trading system may have a dampening effect on global trade. In addition, efforts to promote a more socially and environmentally sustainable recovery process could affect existing patterns of global trade.

Fourth, the global debt level is rising, bringing instability to the macro economy. During the COVID-19 crisis, additional borrowing by governments to sustain their economies could lead to financial instability. Even in the absence of a full-blown global debt crisis, rising debt and debt-servicing obligations could destabilize the global economy. Any increase in interest rates would put pressure on state and private borrowing, with negative effects on investment and international trade flows, particularly in developing countries where fiscal policy space is relatively limited.

Fifth, the consumption trend of consumers may appear lasting changes. During the COVID-19 outbreak, there were significant changes in consumer behavior. Demand increased in some sectors, such as health products, digital services, communications and home office equipment, while demand decreased in others, such as transport equipment, international travel and hospitality services. If some of these changes persist, they will affect consumer demand for foreign goods and services.