The Asia Pacific region's booming economy looks set to power global trade growth in the coming quarter, according to the DHL Global Trade Barometer. Using artificial intelligence and Big Data analytics, logistics company DHL crunches data on global trade developments to get an early reading of the trade picture in the next three months.
"The DHL Global Trade Barometer's latest findings highlight that Asia's trade fundamentals -- and indeed those of its biggest trade partners -- remain robust enough to warrant optimism in the near term, particularly those industries directly involved with manufacturing and production for the region's burgeoning consumer base," says Kelvin Leung, CEO, DHL Global Forwarding Asia Pacific.
The Barometer predicts an overall positive outlook for all four of Asia's largest economies – China, Japan, India and South Korea.
China's imports and exports of industrial raw materials both saw major increases in March, buoying the country's ocean and air freight volumes for the quarter. At the same time, other sectors like high technology and consumer fashion are expected to decline in the next three months – but not for lack of domestic demand, says DHL.
"We've begun to see the effects of 'Made in China 2025’ on China's trade footprint, driving up production of high-tech goods locally at the expense of imports," explains Steve Huang, CEO, DHL Global Forwarding Greater China. "We can expect sectors like information technology, robotics, and biopharma – along with more prosaic items like personal and household goods – to experience a relatively rapid shift into net export territory, alongside a continued rise in imports of the raw materials necessary for production."
The Barometer’s results also suggest that South Korea and Japan are on track for significant acceleration in trade growth, even as India and China maintain some of the highest growth rates among the world's largest economies.
Drivers of trade
The strong growth in ocean freight across Asia Pacific, coupled with steady or rising air freight traffic in the region's bellwether economies, appear to be driven largely by rising trade in industrial raw materials, capital equipment, and machinery – potentially foreshadowing an extended period of development for Asian infrastructure, manufacturing, and domestic consumption.
"The DHL Global Trade Barometer's latest results reveal that economic growth and connectivity have maintained a strong upward trajectory despite any global uncertainty around free trade," says Leung. "It also emphasizes just how interconnected Asia's economies are to the rest of the world.”
Developed jointly by DHL and Accenture, the DHL Global Trade Barometer provides a quarterly outlook on future trade, taking into consideration the import and export data of seven large economies: China, South Korea, Germany, India, Japan, the United Kingdom, and the United States.
Together, these countries account for 75% of world trade, making their aggregated data an effective bellwether for near-term predictions on global trade. The DHL Global Barometer, which assesses commodities that serve as the basis for further industrial production, predicts that global trade will continue to grow in the next three months, despite slight losses in momentum.