The World Trade Organization (WTO)'s latest "Global Trade Outlook and Statistics Report" (hereinafter referred to as the "Report") shows that in 2024,Europe continues to significantly impact global merchandise trade,dragging down the overall performance of imports and exports.

Among them,the main industries causing negative growth in European exports are chemicals and automobiles,while the largest contraction in European imports is in the machinery industry.

On the 10th,WTO Chief Economist Ralph Ossa stated,"When we try to explain the changes in European trade and imports,we first consider the demand in Europe and the changes in major economies,among which Germany has significantly revised their Gross Domestic Product (GDP) forecast,which means that the performance of the German economy is worse than expected,and this has also affected imports such as machinery imports."

Ossa also indicated that the most important two differences between this October's trade forecast and that of April are: first,the trade growth in imports and exports of European economies is weaker than expected; second,the exports of Asian economies are stronger than expected.

The main reason for the decline in European exports is automotive products and chemicals

According to WTO forecasts,world trade will grow by 2.7% in 2024,slightly higher than the 2.6% predicted by the WTO in April last year.It can be seen that both European imports and exports are dragging down global trade growth.

In terms of exports,Europe is expected to shrink by 1.4% in 2024,and by 2.3% in imports.

Ossa stated that the main reason for the decline in European exports is automotive products and chemicals,both of which are concentrated in Germany.

WTO Senior Economist Coleman Nee explained to First Financial Daily reporters that in terms of organic chemicals,some of them were used to produce vaccines,indicating that after the surge in demand due to the pandemic,we may see a return to (traditional) trends.

As for the decline in passenger car exports,"this may be exacerbated by technological changes,as established manufacturers are facing challenges in adapting to electric vehicle production and are experiencing fierce competition from competitors," he explained.He also indicated that,as for Europe in terms of imports,the largest contraction is in machinery.He explained to reporters that the EU machinery import figures he cited are estimated in value (US dollars),not quantity."One possible reason for the decline in EU machinery imports is the decrease in the prices of these products.The actual (average) appreciation of the US dollar could also have a similar impact," he said,adding that in 2024,the US dollar appreciated by about 2%,so this also cannot explain all the reasons for the decline.

He stated that at the same time,a slowdown in Europe's economic growth could reduce the demand for all goods,including machinery.

Asia's contribution to global export growth is expected to exceed all other regions.

As Osa said,in 2024,the exports of Asian economies were stronger than expected.

WTO data shows that the contribution of the Asian region to the export growth in 2024 is expected to exceed other regions,adding 2.8 percentage points to the expected export growth rate of 3.3% for this year; at the same time,Asia is also expected to contribute 1.4 percentage points to the import growth of 2.0% this year.At the same time,North America's contribution to imports will also exceed expectations,partially offsetting the drag from Europe.

Ni explained that due to the increase in shipments of electronic products,automotive products,and other manufactured goods from China,Asia's export growth was stronger than expected,but other economies in the region also reported strong export growth,including India,Vietnam,and Singapore.

He stated that specifically,the export of electronic products (including components and finished products) drove China's export growth,and in terms of value,electronic products seem to have made the largest contribution to the year-on-year growth of China's exports.These include products such as integrated circuits (22%),flat panel displays (20%),and computer components (18%).Exports of other electrical machinery also increased significantly,including air conditioning equipment (17%) and refrigerators (18%).

Ni said that in US dollar terms,China's passenger car exports also grew by nearly 25%.Among them,pure electric vehicles accounted for 38% of China's automotive exports,but only grew by 2% compared to the same period in 2023.On the other hand,the export of traditional internal combustion engine vehicles grew by 26%,and the shipment of hybrid vehicles increased by 182%.

He stated that in the first eight months of 2024,the EU was the largest export destination for Chinese cars,but in fact,shipments to the EU decreased by 1% year-on-year.At the same time,Chinese automotive exports grew significantly in exports to Mexico (33%) and Brazil (132%).

The "connected" economies have emerged.The WTO report also mentioned that due to geopolitical security issues,it can be observed that there is an increasing trend of trade between countries with "like-minded" interests.However,there is no observed global trend towards regionalization or nearshoring.

For instance,the WTO data shows that Singapore,Malaysia,and other Asian economies,including India and Vietnam,exhibit a stronger growth in imports and exports.The WTO stated that this suggests the role of "connecting" economies in global supply chains and trade.

Regarding the rise in exports of economies like India and Vietnam,Osa explained,"This is an interesting development we have seen in the data,which we have already recorded in the previous report."

Furthermore,in 2024,South American trade rebounded from the weak import and export situation in 2023.Among the countries in this region,Mexico's import growth was more robust,indicating that the country's role as a trade "connecting" economy is increasingly strengthening.

He explained to reporters that "connecting" economies like Vietnam and Mexico show that trade,which was originally conducted through bilateral channels,now takes longer routes.

The WTO stated in the report that in the global supply chain restructuring serving the US market,Mexico and Vietnam have become "connecting" economies—acting as the source countries for many products.Even after trade tensions began,these two economies' trade with the US and China has developed in tandem with the rest of the world.