China will face problems in its exports: ECLAC
China will face problems in its exports in 2020, estimated the Economic Commission for Latin America and the Caribbean (Eclac).
China’s product exports totaled $ 185.148 million in March, a 6.6% year-on-year drop, according to China’s General Administration of Customs.
«To the disruption of value chains, is added the fact that China, once it reactivates its production, will face problems in exporting to countries facing the pandemic with a temporary lag with respect to this country,» said ECLAC, in a report released this Tuesday.
Latin America and the Caribbean: effects of COVID-19 on exports of goods by subregions and main exporting countries, forecast for 2020
Thus, one of the main players in world trade will see a decrease in the demand for its exports, which will increase the negative impact on the global volume of trade.
Exports and COVID-19
The drop in world economic activity, particularly in the United States, China and Europe, has a negative impact on Latin America and the Caribbean through trade in terms of volume and price, especially of raw materials.
Some important productive sectors of countries in the region are inserted in global value chains in which the United States and China play a fundamental role.
In addition, Mexico and Central America are exposed to the contraction of the United States economy also through the reduction of migrant remittances; in the case of Mexico, the fall in the price of oil is added.
Global exchanges
The volume of world trade has collapsed. The World Trade Organization (WTO) estimates that it will fall between 13% and 32% in 2020.
Already, the volume of world trade in goods had a negative trend before the pandemic. In 2019, it decreased 0.4%, its first drop since the global financial crisis.
This was largely the result of the accumulation of trade barriers since early 2018 (mainly between the United States and China) and its effect on global value chains. Prospects improved in January 2020 after the «phase one» agreement between China and the United States, but the pandemic ended that short optimism
