CHINA: China to overtake US, dominate trade by 2030
By 2030 the value of goods traded between the US and China is expected to have more than doubled to around US$586 billion. China will overtake the US and dominate global trade by 2030, according to a new report from PricewaterhouseCoopers (PwC). China will be involved in more of the top 25 sea and air […]
April 1, 2011
By 2030 the value of goods traded between the US and China is expected to have more than doubled to around US$586 billion. China will overtake the US and dominate global trade by 2030, according to a new report from PricewaterhouseCoopers (PwC). China will be involved in more of the top 25 sea and air freight routes than any other country, it said. PwC’s findings are a reflection of the World Bank’s prediction that China’s economy will bypass the US by 2030 if it can sustain its growth. The firm’s chief economist Justin Lin has said that China will be twice the size of the US economy in 20 years if it continues to grow at an annual rate of eight per cent. The PwC findings have also shown that China is in a dominant position in terms of bilateral trade, appearing in 17 of the top 25 bilateral trade pairings. Currently, China’s international trade is worth US$2.21 trillion compared to US$2.66 trillion for the US. China has already overtaken Japan to secure its place as the world’s second-biggest economy earlier this year and is the world’s largest goods producer, with 19.8 per cent of all manufactured products coming from the economic heavyweight. By 2030, China is forecast to have moved into a dominant trade position and also coming into the mix are emerging countries such as Indonesia, Malaysia, Nigeria, Thailand, Saudi Arabia, Brazil, India and UAE, according to the report. By 2030, the value of goods traded between the US and China is expected to have more than doubled to around £360 billion (US$585.8 billion). PwC economists used special modeling techniques to project bilateral trade – requiring either sea or air freight – between 29 economies over the next two decades. Aside from China’s rise to prominence in global trade the report also found four key areas that it said could present significant opportunities for transport and logistics firms. These include: Trade within the Asia-Pacific region; trade between emerging and developed economies – inspired by the example of Germany/China; trade between emerging economies, such as parts of Asia and Latin America; and trade between China and Africa. The report noted that while global trade suffered a sharp decline in 2009, it has bounced back robustly over the past year and is estimated to have ended 2010 above its 2008 peak. Trade as a proportion of world GDP is expected to increase in the short term, as the world economy gains strength and confidence. But by 2030 the trade landscape will look quite different, with the emerging and developing economies making up a significant share of global output. Yael Selfin, head of macro consulting at PwC, said: “Transport and logistics companies will need to adapt to the change in trade patterns to ensure they maximise their profit opportunities.” Planning for the trends that will shape the trade landscape over the next 20 years would benefit a company in this highly globalised marketplace. “The ‘first mover’ advantage is likely to be important, and establishing a presence before your competitors on a route that becomes a significant global trade flow is likely to be highly valuable,” said Yael.