East Asian nations have deepened and broadened their global connections even as international trade remained weak, according to the fourth Global Connectedness Index (GCI) released by DHL.
The new report, a detailed analysis of 140 countries, measures depth and breadth of connectedness by cross-border flows of trade, capital, information and people.
The GCI identified Singapore as the world's most deeply-connected economy, followed closely by Hong Kong, while South Korea and Japan ranked fourth and fifth respectively when measuring the breadth of international relationships.
In the overall connectedness index, capturing both depth and breadth, Singapore is the world's second most connected country.
Globalization Hotspots and Giants
For the first time ever, this year's report also introduces two new city indices, which identify "Globalization Hotspots" and "Globalization Giants" based on the intensity and volume of their international flows.
Singapore leads both new indices, with Hong Kong close behind as both a globalization giant (2nd) and hotspot (3rd).
The new report also reveals that cities in East Asia & Pacific average the highest scores in the Giants ranking.
"Despite globalization advancing only modestly, international trade remaining under pressure, and a wave of increasingly protectionist rhetoric emerging in Europe and the Americas, East Asia & Pacific nations have continued to maintain and even expand their relationships with one another and the rest of the world," said Alfred Goh, President, Global Fast Growing Enterprises & Regional Head of Customer Solutions & Innovation, Asia Pacific, DHL.
"The region has taken a proactive stance on increasing its global connectedness with initiatives like the ASEAN Economic Community, China's Belt and Road, and a range of other free trade agreements, alongside increasingly coordinated policies around cross-border e-commerce and customs harmonization.
“That gives local businesses a unique and highly beneficial foundation from which to launch the expansionary efforts, both in Asia Pacific and globally, needed to transform them into truly international enterprises.
“Over the next few years, we foresee more Asia Pacific countries climbing up the ranks to become even more connected, and be well poised at the center of global trade."
The research, led by internationally acclaimed globalization expert Pankaj Ghemawat, also revealed that Cambodia, Vietnam, Malaysia, and Singapore all showed greater intensity of cross-border flows than expected based on their structural characteristics such as size, level of economic development, and geographic location.
China and India, however, continue to lag behind their smaller neighbors in terms of global connectedness -- suggesting even greater room to grow for the two economic powerhouses of the Asia Pacific region.
"Deeper global connectedness can accelerate economic growth," said Ghemawat. "China and India both rank near the bottom of the index in terms of depth, and this is partly explained by these countries' vast internal markets.
“However, further analysis implies that both countries have a great deal of headroom still available to benefit from opening up to larger international flows. Even as Asia likely becomes the new engine of globalization, businesses in the region should diversify where they invest and keep their infrastructure agile to avoid being overexposed to any one market's economic fortunes."