[Correspondent Diary] Estimating the End of COVID-19 Based on China's Export Data

Decrease in Chinese Electric and Electronic Product Exports Previously Boosted by COVID-19 Remote Work
Trend in Chinese Electric and Electronic Exports May Serve as Leading Indicator for End of COVID-19

[Asia Economy Beijing=Special Correspondent Jo Young-shin] After the COVID-19 pandemic, China's exports enjoyed a boom. Despite COVID-19 first emerging in Wuhan, China, the country quickly recovered from the shock of the virus due to its unique lockdown and control-style quarantine policies (currently, China is facing difficulties due to the spread of the COVID-19 Omicron variant across various regions).

Photo by Global Times capture

Thanks to this(?), orders poured into China, the "world's factory." In 2020, when COVID-19 was rampant, China's export value was $2.5907 trillion (KRW 3,171 trillion), a 3.6% increase from the previous year. Last year, China's export value ballooned to $3.364 trillion. The trade surplus last year alone was $676.4 billion, the largest scale since China began compiling annual trade balance statistics in 1950. While the world suffered from COVID-19, China, in crude terms, made a "fortune."

China's exports were driven by IT-related electronic and electrical products such as computers and smartphones. Globally, as remote work increased and elementary, middle, high schools, and universities switched to online classes, demand for related products surged.

In fact, last year, China's exports of electrical and electronic products reached 12.83 trillion yuan (KRW 2460 trillion). The export share of these products accounted for 59% of China's total exports. China's electrical and electronic products clearly benefited from the COVID-19 boom.

However, this trend has changed. From January to February, exports of electrical and electronic products (including smartphones and mobile phones) decreased.

According to the General Administration of Customs of China, exports of mobile phones and electrical and electronic products from January to February were $23.21 billion and $14.07 billion, respectively, down 7.9% and 3.6% compared to the same period last year.

In this regard, there is analysis within China that consumption of electrical and electronic products related to the "home economy (宅經濟)"?which enjoyed a boom over the past two years?is showing signs of change.

The Ministry of Commerce of China pointed out three main reasons for the decline in exports of electrical and electronic products related to the home economy. First, as overseas epidemic control measures eased, the time spent at home decreased, leading to reduced demand for home economy-related products. Second, shortages of components due to rising prices of key raw materials such as semiconductor chips and supply chain bottlenecks caused by the resurgence of COVID-19 in China are estimated to have affected the export decline. Third, geopolitical risks such as Russia's invasion of Ukraine are interpreted as having a negative impact on global trade.

However, considering that China's total exports from January to February increased by 16.3% year-on-year to $544.7 billion, it appears that the easing of global COVID-19 control measures had a greater impact.

Some opinions suggest that China's electrical and electronic product export figures could serve as a leading indicator to gauge the end point of the COVID-19 pandemic. It seems necessary to closely monitor the export trends of related products announced by the General Administration of Customs of China.

This content was produced with the assistance of AI translation services.