TRADE tensions between the United States and China have opened up opportunities for developing countries such as the Philippines, the chief executive of global delivery firm DHL Express said.
At the launch of the firm's Global Connectedness Tracker update last week, DHL Express CEO John Pearson said countries that were not strong allies of either the US or China had increased their share of global trade over the last eight years.
"Mexico, Brazil, [the] UAE (United Arab Emirates), Vietnam, India are five great examples of that," he said during a virtual briefing.
"...I'd go on to say that countries that are the beneficiary of China+1 and diversification of supply chains into Vietnam, into Indonesia, into the Philippines, into India ... [also stand to gain]," he added.
Latest developments "suggests that these nations have become more important players in global commerce, possibly by diversifying their trade relationships or capitalizing on emerging opportunities outside the influence of the US and China," Pearson continued.
China+1 is a supply chain strategy where companies expand to other Asian markets in a bid to mitigate risks. It gained popularity about a decade ago as labor costs rose in China and has again come to the forefront in the wake of the Covid-19 pandemic and rising geopolitical tensions.
The collective share of world trade by countries that are not close allies of both China and the US grew to 47 percent as of this year from 42 percent in 2016, DHL Express said in the November update to its Global Connectedness Tracker report.
The update was released amid rising concerns over deglobalization, or diminishing interdependence and integration among countries, and the impact from a second Donald Trump presidency.
Globalization, DHL Express noted, remains limited at 25 percent even after decades of efforts to improve flows across national borders. It remains substantially resilient, however, amid geopolitical tensions and uncertainty.
While US-China trade continues to diminish — direct shipments have fallen to 2.6 percent of global goods trade this year from 3.5 percent in 2016 — it was said to comprise a "small part of the world's international flows."
While there is some weakening of ties between rival geopolitical blocs, a major split has yet to occur, DHL said, and regionalization is also not overtaking globalization.
DHL Express, in its biennial Global Connectedness Report that was released in March this year, rejected the notion that the world had entered a period of deglobalization. The Connectedness Tracker, which provides updates between the release of full reports, reiterated the view made in March.
"We see neither a global pattern of rising regionalization, nor a substantial change in the diversification of countries' flows across partner countries," it said, adding that "deglobalization remains a risk, not a current reality."
Amid fears of increased protectionism under Trump, it said that decision-makers should remember that trade flows remained resilient through Brexit when the United Kingdom chose to leave the European Union, the US-China trade war during the first Trump presidency, the Covid-19 pandemic and the wars in Ukraine and Gaza.
"The future is unknown, but recent history suggests a cautious view of predictions that new shocks will reverse globalization," DHL Express said.
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