ABSTRACT
In this study, we employ China’s monthly export and import data to analyse the impacts of the COVID-19 pandemic on China’s trade performance in 2020. First, at the aggregate level, there is a clear ‘off the cliff and back’ trend and a V-shape recover of China’s foreign trade, especially for China’s exports. Second, across sectors, our decomposition analysis reveals that the machinery and transport equipment sector, manufactured materials sector, and the mineral fuels sector played dominant roles in the dynamics of China’s foreign trade during the pandemic. Third, across countries, the ASEAN and the EU played important roles in driving the trajectories of China’s foreign trade, with the former being crucial in stabilising both China’s exports and imports. Finally, exports from the processing trade or foreign-owned firms were more severely hurt, recovered by less, and at a slower pace than those from ordinary trade or by domestic-owned firms. This is consistent with the notion that firms more deeply engaged in global supply chains were more negatively affected by the pandemic since they are more sensitive to disruptions in international transportation and global production networks.
