DHL: Asia triangles to build growth through 2028

DHL: Asia triangles to build growth through 2028    Three Asia-centered trade triangles are expected to contribute almost 40 percent of global trade by 2028, according to a DHL report released last week during the APEC CEO Summit 2009 in Singapore.
   The nexuses identified in the report are intra-Asia, Middle East/Africa/Asia and Latin America/Asia.
   'Asia's economies, particularly China and to a lesser extent India will remain the center of gravity for trade,' said Herman Ude, chief executive officer of DHL Global Forwarding, Freight. 'Within the three identified triangles of trade, China's imports of raw materials and exports of various manufactured goods such as industrial machinery, textiles and telecommunications and office equipment dominates trade volumes.
   'There's no doubt Asia and the emerging markets will shape the direction and future for economic and commercial expansion. If we look at the global logistics market in 1999, Asia's share of it stood at 34 percent, or $15.57 billion. By 2008 this figure had grown to $339 billion, making up 46 percent, or nearly half of the worldwide market.'
   Within intra-Asia trade, DHL expects China to be responsible for some 40 percent of trade, led by the import of raw materials into China and the exports of textiles, industrial machinery, telecommunications and office equipment and foodstuff. Of these, China's trade with Korea, Taiwan, Japan, Hong Kong and Thailand will continue to dominate trade volumes. Chinese exports to India, Indonesia and Malaysia are also expected to grow rapidly.
   A significant part of current trade within the Middle East/Africa/Asia growth triangle is contributed by oil and gas exports from the Middle East to Japan, South Korea, Taiwan and Singapore, but growth on these lanes is stagnant, DHL said. Trade growth within the triangle will come from China's trade with South Africa, Saudi Arabia and United Arab Emirates through China's imports of raw materials — crude oil, iron — and exports of textiles, apparel, machinery and metal products.
   India's contribution to growth is also significant. Raw materials are key imports (crude oil from the Middle East and coal from South Africa) while exports are various foodstuff (grain, vegetables) and textiles destined for the Middle East.
   Meanwhile, the report said from 2008 to 2018, Latin America/Asia trade is expected to grow 4.2 percent, more than double world trade growth at 2 percent. That would also be the fastest projected growth between the three key areas DHL identified. Key lane growth between China and Latin America is expected at 5 percent during the same period, aided by imports of metals, ores and animal feed as well as China's exports of manufactured goods — electronics, textiles and machinery. Imports from Latin America to India, Indonesia and Thailand will also figure prominently.
   The report also identified a few trade trends that will be shaped by Asia's more prominent role.
   Among them, emerging economies will account for a larger share of the world's trade. Asia's gross domestic product (excluding Japan) accounted for 9 percent of global GDP in 1990. By the 2008, it was 15 percent. By 2015, it's expected to be 20 percent.
   As has been mentioned in previous DHL reports on logistics, the centers of labor and consumption will also change in the next two decades, with larger labor forces and new consumers clustered in emerging economies in Asia, the Middle East, Africa and Latin America.
   At the same time, those population clusters will have larger income and disposable wealth, the study said.
   Finally, the report indicates that Asia's 'hunger' for natural resources will continue to be a driver of global trade through 2028.
   'Asia's economic expansion and China's rapid growth in particular are drivers for the region's hunger for resources,' DHL said. 'China's approach towards trade — investments in exchange for mining rights will drive trade growth, especially between Asia and Africa.'