Global trade is undergoing significant change. The increasing trend of anti-globalisation – and, in particular, the burgeoning US-China trade war – is challenging the established, interwoven ecosystem of world trade, potentially impacting access to US markets and posing a threat to Asian export volumes. Yet, Asian trade remains robust.
June 06, 2019 | Arnon Goldstein and Joon Kim• Asia is positioned as a trade engine, with a strong manufacturing base, a rapidly growing consumer market and a commitment to enhancing intra- and interregional connectivity.
• Local banks are increasingly looking to harness new technology capabilities to help streamline the flow of trade finance.
• Correspondent banking remains a crucial facilitator of robust trade growth.
Asia is a thriving manufacturing and export base, fuelled by rising wealth levels and rapid population growth – its share of the world population is expected to remain above 50% until at least 2030 – it is also a rapidly growing import market. Intraregional trade to satisfy these increasing consumer demands is therefore increasing. According to the Asian Development Bank (ADB), Asia is quickly becoming such a large market that expanding trade within the region might help to offset “lost” US exports .
Collaborative frameworks to boost trade
With economies in Asia strengthening, efforts are underway to promote more free-flowing intraregional trade. For example, the Belt and Road Initiative (BRI) is increasing connectivity through improved infrastructure. This will help to reduce logistics costs and shipping times and could ultimately boost trade within Asia.
The BRI project could also help to support the vision of the ASEAN Economic Community (AEC), which is to bring Southeast Asian economies together as a single production base and consumer market. If this were to be achieved, ASEAN would become the world’s third largest market in terms of population , with a combined GDP of $2.4 trillion .
Elsewhere, as the AEC aims for regional cohesiveness, the Regional Comprehensive Economic Partnership (RCEP) free trade agreement is striving to widen that cohesive geographic space. As well as the 10 ASEAN countries, the RCEP also includes Japan, India, South Korea, Au...
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Keywords:Global Trade, Free Trade, Interregional Connectivity, Blockchain, Belt And Road, Aec, Ocr, Rcep, Swift Gpi
