According to a report issued Thursday, China’s share of global trade growth will fall by half over the next five years as enterprises diversify their international production and distribution networks and the country focuses more on expanding its local supply base.
According to the analysis, which was created by New York University’s Stern School of Business and German transport and logistics behemoth Deutsche Post DHL Group, China’s share of global trade growth—imports and exports—will fall to 13% from 2022 to 2026. According to the research, this is a decrease from 26% between 2016 and 2021. Every figure is calculated on an annual basis.
According to Steven A. Altman, the report’s principal author and senior research scholar and head of the DHL Initiative on Globalization at the Stern School, the economic and geopolitical ramifications of the COVID-19 epidemic will play a limited impact in propelling China’s trade activity until mid-decade.
Altman believes that a forecasted fall in China’s GDP growth will be more of a contributing element. Slowing GDP growth almost usually correlates with decreased trade volumes, he claims.
Furthermore, after excelling in 2020 and 2021, China will see a mean reversion in export growth during the next five years, according to Altman.
Among the individual nations examined in the 272-page analysis, China will continue to be the world’s trade leader. Through 2026, it will account for 3.4% of total export volumes and 4.1% of total import quantities. The report examined trade activities in 173 countries.
The “DHL Trade Growth Atlas,” the first of its kind, provides a picture of a wider canvas for trade activity as enterprises seek out new markets for supply and consumption. According to the analysis, the ten countries that comprise the Association of Southeast Asian Nations (ASEAN) trade bloc would hold the top rankings for import and export growth until 2026. According to the estimate, the ASEAN bloc will account for 12.2% of total trade volumes during the next five years.
According to the analysis, Sub-Saharan Africa, the Middle East, and North Africa would see the greatest increases over the two cycles. Over the next five years, Sub-Saharan Africa will account for 4.4% of total export volumes and 4.9% of total import volumes. In comparison, between 2016 and 2021, imports fell by 0.1% while increasing by 1.1%.
According to the analysis, the Middle East and North African region would handle 3.5% of all exports and 4.4% of all imports during the next five years. This compares to 0.8% and 0.9% growth rates from 2016 to 2021, respectively.
Nonetheless, wealthy countries will account for 55% of global commerce during the next five years, according to the analysis. According to the research, Europe will contribute 35% of total trade growth, roughly equal to East Asia and the Pacific combined.
Despite the economic blow of the pandemic, trade flows have remained robust. According to the research, goods commerce was 10% higher at the end of last year than it was before the pandemic. Over the next five years, trade growth is likely to outpace GDP growth, driven by significant cross-border e-commerce development.
The research drew data from secondary sources like the International Monetary Fund as well as primary sources like DHL’s previous macroeconomic estimates. Altman stated that he expects to produce such analyses on an annual or biannual basis.
