The new crown pneumonia epidemic will have a negative impact on China's imports and exports in the short term, but in the long run it will not change the basic trend of China's foreign trade development under pressure. In addition, the epidemic will have a certain negative spillover effect on global international trade. The spread of the epidemic will test the ability of countries to respond to a certain extent. However, as China's economy and foreign trade recover after the epidemic, the development of global international trade will return to its Potential level.

1. The epidemic will have a certain negative impact on export trade in the short term

From the perspective of export structure, China's main export products are currently industrial products, accounting for up to 94%. As the epidemic spread to all parts of the country during the Spring Festival, due to its impact, the resumption of work in various industrial enterprises during the Spring Festival has been delayed, supporting industries such as transportation, logistics, and warehousing have been restricted, and inspection and quarantine work has become more stringent. These factors will reduce the production efficiency of export enterprises in the short term and increase transaction costs and risks.

From the perspective of the return of labor from enterprises, the impact of the epidemic appeared after the Spring Festival, which severely affected the normal flow of personnel. Chinese provinces have formulated corresponding personnel movement control measures based on the development of the local epidemic situation. Among the provinces with more than 500 confirmed cases, with the exception of Hubei, which is the most severely affected, Guangdong (exports accounted for 28.8% of the country in 2019, the same later), Zhejiang (13.6%), Jiangsu (16.1%) and other foreign trade Large provinces, including Sichuan, Anhui, Henan and other labor-exporting provinces. The superposition of these two factors will make it more difficult for Chinese export companies to resume work. The recovery of enterprise production capacity depends not only on the local epidemic control situation, but also by other provinces' epidemic response measures and effects. According to the overall national migration trend during the Spring Festival travel period provided by Baidu Maps, compared with the situation of the Spring Festival travel in 2019, the return of people in the early Spring Festival travel period in 2020 was not significantly affected by the epidemic, and the epidemic in the late Spring Festival travel period had a great impact on the return journey of people.

From the perspective of importing countries, after the World Health Organization (WHO) declared the new crown pneumonia epidemic to constitute an international public health emergency (PHEIC) on January 31, 2020, although the WHO does not recommend travel or trade restrictions, there are still some contracting parties Implement temporary controls on the export of certain categories of commodities in China. Most of the restricted product categories are agricultural products, which will have limited impact on China's overall exports in the short term. However, as the epidemic continues, the number of countries subject to trade restrictions may increase, and the scope and intensity of temporary measures may also increase.

From the perspective of shipping logistics, the impact of the epidemic on exports has already appeared. Calculated by volume, 80% of global trade in goods is transported by sea, and changes in marine shipping business can reflect the impact of the epidemic on trade in real time. As the epidemic continues, many countries such as Australia and Singapore have tightened their Hong Kong regulations. International shipping company groups such as Maersk and Mediterranean Shipping have all stated that they have reduced the number of ships on some routes from mainland China and Hong Kong. The average charter price in the Pacific region has fallen to the lowest level in the last three years in the first week of February 2020. This indicator reflects the impact of the epidemic on export trade from the perspective of the shipping market in real time.

2. The long-term impact of the epidemic on exports is limited

The extent of the impact on export trade mainly depends on the duration and scope of the epidemic. Although the epidemic will have a certain impact on China's export trade in the short term, its impact is staged and temporary.

From the demand side, external demand is generally stable, and the global economy is bottoming out. On February 19, the IMF stated that the current global economic development has demonstrated a certain degree of stability, and related risks have also been reduced. It is expected that the global economic growth this year will be 0.4 percentage points higher than 2019, reaching 3.3%. According to data released by Markit on February 3, the final value of the global manufacturing purchasing managers' index PMI in January was 50.4, slightly higher than the previous value of 50.0, that is, slightly higher than the 50.0 watershed of prosperity and decline, a nine-month high. The growth rate of output and new orders has accelerated, and employment and international trade volumes have also stabilized.

From the supply side, China's domestic production will gradually resume. In response to the negative impact of the new crown pneumonia epidemic on export trade, China has increased its counter-cyclical adjustment and fiscal and financial support, and various localities and departments have introduced measures to increase support for relevant enterprises. The problem of enterprise resumption of work is gradually being resolved. According to statistics from the Ministry of Commerce, the overall progress of the resumption of work and production of foreign trade companies in various regions has been accelerating recently, especially the leading and leading role of major foreign trade provinces. Among them, the resumption rate of key foreign trade companies in Zhejiang, Shandong and other provinces are all around 70%, and the resumption of work in major foreign trade provinces such as Guangdong and Jiangsu is also progressing fast. The progress of the resumption of work of foreign trade enterprises in China is in line with expectations. With the normal production of foreign trade enterprises, the large-scale recovery of logistics and transportation, and the gradual recovery of industrial chain supply, the foreign trade situation will gradually improve.

From the perspective of the global supply chain, China still has an irreplaceable role. China is the world’s largest exporter and has the world’s most complete manufacturing industry chain cluster. It is in the middle of the global industry chain and is located in a key position in the upper and middle reaches of the global production division system. The short-term impact of the epidemic may boost some production capacity in some areas. The transfer of China’s foreign trade will not change China’s position in the global supply chain, and China’s competitive advantage in foreign trade still exists objectively.