The current global economy is in dire straits and the COVID-19 pandemic has caused the fastest and deepest economic shock in history. The impact on trade has been unprecedented.
The pandemic hit at a time when trade was already weak, largely driven by trade tensions between the US and China.
Geopolitics and the recovery from the COVID-19 pandemic will define the landscape for global trade growth in the 2020s.
The increasingly antagonistic relationship between the US and China has further weakened the geopolitical order, reducing the potential for cooperation in the face of global crisis. As a result of this, the global economy has experienced a significant spill-over effect where the WTO reported that global goods trade fell by 3 per cent to US$18.89 trillion.
No other crisis has impacted international trade as much as the COVID-19 pandemic. While it is expected that per capita GDP will return to pre-crisis levels in eight years, recovery will be dependent on the effectiveness of the public health and economic response by governments, and the eventual development and mass roll-out of a vaccine.
Through on-shore manufacturing, China is moving towards becoming self-reliant. The evolving Chinese economy will facilitate the emergence of new trade hubs that focus on manufacturing, finance and technology will help define the Future of Trade.
Other countries’ manufacturing capabilities will gain more prominence as they inherit China’s export business, especially from the US.
Key finance centres across Asia will challenge the New York-Hong Kong-London-Tokyo axis as they build their reputation as strategic international finance hubs.
Manufacturing will move closer to centres of consumption, as the industry improves on automation and additive manufacturing technologies.
The Commodity Trade Index (CTI) ranks ten of the key commodities trading hubs on 10 indicators across three factors to produce an index score.
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