Impact of COVID 19 on international trade and China’s trade

Abstract

Abstract. As COVID-19 emerged from China and spread around the world like a pandemic, it was not just a health disease threat perhaps it could affect the world economically, politically, socially and educationally so, this research is conducted to find the impact of COVID-19 on international trade and China’s trade. To determine the effects of COVID-19 on global trade, a comprehensive analysis was conducted on forty-two countries using computable general equilibrium (CGE) model. These components comprise things such as industries, governments, importers and exporters, investors, and households. The results were obtained by using 2018 data from the Asian Development Bank and the International Monetary Fund.The impact of Covid-19 on GDP has been predicted under two scenarios. These are the short and long containment scenarios. Under the short containment scenario, global trade will be cut by about 905 billion US Dollars. Global trade will be cut by 2,095 billion US Dollars under the long containment scenario. From the simulation, growth in GDP will fall by 5.4 percent under the short containment scenario growth in GDP will fall by 3.7 percent in Asia and by 2.8 percent in the world, Asia is expected to contribute the most to the general decline in global output by a figure of 48 percent. Covid-19 will impact wage income most in the EU, UK, and the US. On a global scale, labor income will fall by 535 billion US Dollars under the short containment scenario. Labor income will fall by 1053 billion US Dollars under the long containment scenario. China is the core of export and import in Asia and COVID-19 could affect the Asia negatively so it could be concluded that COVID-19 could affect the China’s trade indirectly during the COVID-19.

Keywords. COVID-19, International trade, China’s trade.

JEL. F17, F14, F02.