Changes in Global Market Trade

Even though global market trade has been in a bit of disorder lately, great advances are expected in trade between Asia, Africa, North America, and Europe by the year 2020. Currently, China's trade is growing, just not at margins seen in the past. With only an expected annual growth rate of 5% over the next five years, China's slowing trade growth comes at a cost from weaker growth among emerging markets. This slowing of China's trade will lead to new trade expansion in the global market.

Even though China's market power will not disappear, other areas such as Southeast Asia are starting to experience high levels of trade growth. Many countries in this region are benefiting from the energy and commodity price falls, as Vietnam, India, and other South Asian economies are net importers of these goods. Vietnam in particular is estimated to increase exports by 44% by 2020. When compared to China, Vietnam's actual cargo numbers may be small, but growth of this magnitude for this economy is a huge improvement.

There is also expected to be a great trade boom between East Africa and China. Trade routes incorporating Malawi, Mozambique, Zambia, and Zimbabwe are expected to see the highest growth over the next five years.  With a staggering increase expected of 91% in trade between East Africa and China by 2020, East Africa is bound to become the new hub for manufacturing goods for the Chinese. Being able to take advantage of comparatively lower operating costs and to offshore manufacturing activities to East Africa, China stands to benefit greatly. This will have great affects on East Africa as well. In fact, China's leadership has publicly committed to promoting development of regional integration and infrastructure within the region.

A new advancement that is to be implemented over the next five years, that will enable these expected trade growth measures to be attainable, is the employment of larger container ships. These new "super containers" will be capable of transporting over 50% more cargo, helping to streamline the global supply chain. 

Keep up to date on other international business news and the latest developments by following the globalEDGE blog.