Trade Winds report makes range of forecasts for global trade to 2050.
Asia is poised to ignite a decade of global trade growth and be the starting point for a quadrupling of worldwide exports to an estimated $68.5 trillion by 2050, according to new forecasts in HSBC’s landmark Trade Winds report released on November 24.
The report identifies three distinct waves of trade development, the first from 1865 to 1913, the second from 1950 to 2007, and the third set to run from 2015 to 2050. The map of world trade created by this third wave of globalization may look very different from today’s, as shifting demographics and economic catch up - with almost 3 billion people joining the middle class by 2050, most of whom will be in emerging markets - lead to significant shifts in trade patterns.
Vietnam strengthens its position in this third wave of globalization, becoming the world’s tenth-largest exporter by 2050 with export value reaching $1.437 trillion, following China, the US, Germany, South Korea, India, Mexico, France, Japan, and Singapore.
India also has the potential for strong growth and is projected to outpace China. The report expects growth in goods exports from India to average 6 per cent a year in the 2025-2050 period, compared with just under 5 per cent a year for China.
The importance of trade’s contribution to global growth and prosperity cannot be underestimated, HSBC’s Regional Head of Commercial Banking, Asia Pacific, Mr. Paul Skelton, said. “Asia’s position at the leading edge of technological and supply chain innovation gives the region a unique opportunity to benefit from this next wave of globalization,” he said.
Asia-Pacific’s share of global exports is forecast to rise from around one-third in 2015 to 46 per cent in 2050. Western Europe’s share is expected to decline from 34 per cent to 22 per cent, and North America’s to fall from 11 per cent to 9 per cent.
Led by a burst of intra-Asian trade that will lift the region’s share of global exports to 27 per cent by 2050 from 17 per cent at present, the surge will mark a third wave of globalization.
The report identifies four “trade winds” that will drive opportunity for the business leaders of today and tomorrow: the march of industrialization and a shift to mass customization, plummeting transport and logistics costs, further liberalization of trade policy, and the evolution of more nimble business operating models.
Nimble networks of micro-multinationals that create their own specialized value chains will be at the core of a drive for prosperity that promises to take nations out of poverty and improve quality of life across the world, according to the report, which was commissioned by HSBC Commercial Banking and compiled by Oxford Economics.