The last twelve months have seen a large increase in cross-border e-commerce traffic, primarily driven by China which has increased its share as the main origin of shipments. Chinese cross-border e-commerce growth in turn appears to have been largely driven two platforms, Temu and Shein, which together with the various Alibaba Group marketplaces and Amazon account for the bulk of international volumes. We estimate that Chinese cross border e-commerce trade grew by almost 30% last year and accounted for over 8% of the value of Chinese international trade.
Trade Data Service
The decline in US air trade with China is being compensated by cross border e-commerce. After declining 11% in 2022, cross border e-commerce volumes have grown 55% in 2023 and are now 38% higher than in 2021. This increase is evident in South China and Hong Kong air cargo traffic into the US.
Chinese cargo traffic data indicates an e-commerce driven surge in year-end air freight volumes not reflected in trade data. Due to value reporting thresholds trade data does a poor job of tracking cross border e-commerce volumes which by some accounts could account for a fifth of international air cargo volumes. Chinese international air cargo shows strong growth over the last three months.
This week the IMF published its 6 monthly world economic outlook and associated databases. Compared to the April 2023 version, the outlook for trade in 2023 has deteriorated. The current expectation for 2023 goods imports is a decline of 0.5% rather than growth of 1.6%. At a country level, the picture is mixed – with some countries showing an upgrade and others a downgrade of their previous outlook. This article focuses both on the overall outlook as well as where changes have occurred.
The Philippines accounts for about 18% of Southeast Asia’s population and about 12% of its economic output. The Philippines and with Indonesia and Vietnam are expected to be within the top three performers in the region in terms of economic growth, imports and exports. Philippine import and export performance has been disappointing this year, but after a weak first quarter volumes have been picking up since the middle of the year. Indicators point towards further strength.
Mexican trade has shown healthy growth this year, with export value up 7% and imports 6% for the first half of the year. Both import and export growth has been primarily driven by the automotive sectors as well as industrial equipment and parts. Data indicates that Mexico is benefiting from tensions between the US and China, particularly in relation to automotive imports and exports.
China has a market share of about 20% of the world electric car market outside China as well as being the world's largest electric car market. Growth in Chinese car exports has been exponential with exports of electric cars growing 123% so far this year. However, electric export growth has also been picking up in traditionally combustion focused countries such as Japan.
PRC (including Hong Kong), USA, Germany, and the UAE today account for about 56% of import and 40% of export value. The importance of China as a source of imports and the US as a source of exports has increased. On a commodity level, Indian exports have diversified away from apparel and footwear towards industrial equipment and parts and mobile phones and communication equipment. The import side has seen an increase in the importance of semiconductors and related equipment. Pharmaceutical and automotive exports have grown, but their share of total trade value has stayed constant.
China to Europe rail volumes are down over 40% in the first quarter of 2023. This article discusses the different factors behind the continued weakness in intercontinental container trade by rail between China and Europe.
The overall outlook for world trade in 2023 is nothing to get excited about, but it’s not all doom and gloom. Short- and medium-term growth of both exports from and imports into Southeast and South Asia are expected to do well, including to and from Indonesia, India, Turkey, Singapore, Vietnam, and Saudi Arabia. The US and China may continue to drag down overall world trade growth, which is expected to be around 1.5-1.7% in 2023 and 3.2% in 2024.