Which export industry in China has the greatest impact of the new crown epidemic?

Which export industry in China has the greatest impact of the new crown epidemic?

As of April 12, the cumulative number of newly diagnosed cases of New Coronary Pneumonia has exceeded 1.8 million, and the number of deaths has exceeded 100,000. Its spread overseas is still in the rising stage. Future uncertainty will mainly be transferred from Europe and the United States to third world countries. Chinese pressure to prevent and control the epidemic situation and the local outbreak will continue. The impact of the new crown pneumonia epidemic on the global industrial chain is comprehensive. As one of the central countries in the value chain, China will also have the most significant negative impact. Based on the cross-analysis of the product structure and geographical distribution of China ’s exports, we believe that the impact of the epidemic on China ’s exports will be concentrated in major export industries such as electromechanical, machinery, textile, furniture, plastic products, vehicles and parts, and steel products.

The impact of the epidemic on China ’s exports is reflected in three aspects: one is the direct impact of the decline in foreign demand, the second is the lack of supply of raw materials and components for China ’s exports of goods due to the stagnation of foreign economies, and the third is the trade logistics caused by border controls and population restrictions in various countries. Obstructed, of which, the decline in foreign demand may be the mainshock. China’s exports are expected to fall by more than 25.5% in April and May.

The global development of the epidemic will further affect other major export destinations in China. Russia, Malaysia, Indonesia, Thailand, Vietnam, the Philippines, Switzerland, and other countries have experienced a rapid increase in daily new cases. These regions have contributed greatly to China’s exports. The economies of provinces that are highly dependent on China for exports may be hit hard, including major export provinces and cities such as Guangdong, Jiangsu, Zhejiang, Shanghai, and Shandong. Stabilizing foreign trade enterprises and stabilizing employment are urgent issues that need to be resolved.

In terms of export structure, China’s main export products are industrially manufactured products, accounting for 94%. In terms of exports, exports of motors, electrical appliances, audio-visual equipment, and parts accounted for 26.88%, exports of nuclear reactors, boilers, mechanical appliances, and parts accounted for 16.71%, and exports of textile raw materials and textile products accounted for 10.44 %, The export value of base metals and their products accounted for 7.32%. Other large proportions include miscellaneous products, chemicals, plastics, and products, vehicles, and transportation equipment, optical and medical instruments, shoes, hats, and umbrellas. However, the exports of live foods such as animals, plants, food, tobacco, alcohol, and beverages account for a relatively small amount, about 3.1%. According to the economic data released by China from January to February 2020, the consumption of life foods during the epidemic blockade was relatively small. The greater impact on the decline in demand for mechanical, electrical, and textile commodities means that the foreign epidemic situation will have a greater impact on China’s main export commodity categories.

China’s main trading partners are the European Union, the United States, ASEAN, Japan, South Korea, India, the United Kingdom, Brazil, and other countries and economies. In 2019, China exported 2.96 trillion RMB to the EU; 2.89 trillion RMB to the United States; 2.21 trillion RMB to ASEAN; 990 billion RMB to Japan; 766.8 billion RMB to South Korea. In the regions marked with serious epidemics in Figure 2, China’s exports to these major economies accounted for about 54.5% of the total exports, of which exports to the EU, the United States, Japan, and South Korea accounted for 44.2% of the total exports. The epidemic situation in ASEAN countries is also rapidly deteriorating. As of April 10, Malaysia, Indonesia, Thailand, the Philippines, and other countries have cumulatively diagnosed more than 2,000 cases. Recently, more than 100 new cases have been added every day. Measures to prevent the development of the epidemic, it is expected that China’s exports to ASEAN countries will also be greatly affected. Iran is also one of the countries with the worst epidemic. China exported 66.3 billion RMB to Iran in 2019, accounting for a small proportion of total exports, about 0.4%.

China’s top ten categories of exports account for 75% of total exports. More than 50% of the top ten export commodities flowed to the countries and economies with the most severe epidemic, including furniture, bedding, etc. (73.47%), toys, games, sports equipment, etc. (77.88%), organic chemistry (68.86% ), Nuclear reactors, boilers, mechanical appliances and parts (60.65%) flowed to countries with severe epidemic situation accounted for more than 60%. This shows that the negative impact of China’s demand for major export commodities will be greatly affected by the epidemic.

The structure of imports of Chinese goods by China ’s main trading countries and regions is relatively consistent. From the import data of the United States, the European Union, Japan, and South Korea, the first name is electrical machinery, electrical, audio-visual equipment, and its accessories, and the second name is a nuclear reactor, the third name for boilers, mechanical appliances, and parts is textile raw materials and textile products. In terms of import ratio of other categories of commodities, the difference between the import proportion of each category of commodities of the United States, the European Union, Japan, and South Korea and the average level of China’s exports is less than 3%, and the order of proportion is basically the same as that of China’s top ten commodities. This shows that the impact of foreign epidemics on China’s export industry is roughly the same proportion. The larger the industry’s export scale, the greater the impact.

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