Global trade has boomed in the last few years and for many countries it is expected to continue to climb.
The world’s leaders are preparing to meet in Davos, Switzerland next week for the annual World Economic Forum and the future of globalisation is expected to be on the agenda.
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Globalisation — underpinned by free trade agreements and technological leaps forward — has lifted hundreds of millions of people out of poverty due to the rapid rise in production and demand.
Over coming years many more will be affected by globalisation.
Here are the some of the highlights looking back over recent years and ahead to what the future will bring.
China
Easily and undeniably globalisation’s biggest success story, China’s biggest challenge now after its years of rapid growth is a so-called soft landing as it tries to nurture its brand new middle class.
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By GlobalData(Source: GlobalData analysis and projections on WTO data)
- China’s trade has steadily increased since 2005;
- Twenty years on from 2005 and China’s total trade will increased by a factor of five;
- A Chinese government-run think tank reckons the country’s economic growth could slow to 6.5 percent in 2017 from about 6.7 percent in 2016;
- China’s peak GDP growth reached a whopping 19.3 percent year-on-year in 1970, according to World Bank estimates, and
- More recently it recorded GDP growth of 14.2 percent 2007.
US
It’s in the US that we’re seeing the biggest backlash against globalisation, not just with the election of Donald Trump, but with the lose of establishment candidate Hillary Clinton.
[verdict_chart id=”1786″]The roaring success of the US economy in recent years has not benefited everyone and some are not fans of globalisation and the way it has changed manufacturing in the country. Trump has promised to protect US jobs to a degree not seen since the 1930s, and is expected to slap heavy sanctions and taxes on businesses that relocate jobs abroad.
Financial markets are meanwhile concerned about the structural changes Trump is planning for the US economy. He has threatened to brand China a currency manipulator, a decision that could easily prompt a full-scale trade war.
The two trade deals Barack Obama has been negotiating – the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP) are dead in the water.
Despite Trump’s hard line rhetoric he is inheriting an economy that is far stronger than the one that Obama picked up in 2009. While globalisation has had a highly positive effect on the financial bottom line in the US, the wealth imbalance it has created could be a step too far.
(Source: GlobalData analysis and projections on WTO data)
- Total US trade is set to continue to rank beyond the likes of global competitors China and Russia;
- By 2025, US trade is forecast to be more than double what it was in 2005, and
- Today UK foreign secretary Boris Johnson claimed that the UK is “first in line” for a free trade deal with the US after the Trump administration takes office on 20 January.
Russia
Russia has been keen to partake in globalisation, just in its own so-called sovereign way. As the dominant energy supplier to Europe Russian president Vladimir Putin has been able to manage a controlling state alongside a prosperous economy.
However a slowdown in energy-export-led growth, global energy market developments in the form of the Opec shale war, and Western sanctions are depriving it of goods, capital and technology have all meant Russia’s strategy could change.
[visualizer id=”1789″](Source: GlobalData analysis and projections on WTO data)
- Russia’s trade is forecast to increase more than threefold from 2005 to 2025, and
- Crude oil trade makes up more than 50 percent of Russia’s total exports
- As of 2014 Russia had a positive trade balance of $154bn in net exports. As compared to their trade balance in 1995 when they still had a positive trade balance of $11bn in net exports.
India
With a growth rate now beyond that of China, India looks set to benefit a great deal further from globalisation as the country. Not all are fans of the developments however, warning over the wealth inequality, corruption, and a lack of amenities and infrastructure in the country.
[visualizer id=”1790″](Source: GlobalData analysis and projections on WTO data)
- Soon after the turn of the millennium India’s trade jumped quite dramatically and by 2025, India’s trade is forecast to increase to approximately four times more than it was in 2005
- India’s trade is set to increase more from its level in 2005 than other world economies including the US, China and Russia, and
- India’s two biggest trade partners are the US and China and there have recently been warnings an escalating trade war triggered by the US president elect Donald Trump with Mexico and China, India may find itself in the cross fire with collateral damage to its economy.
UK
As a result of globalisation the UK has, like the US, lost much of its manufacturing industry to abroad. The financial services sector has swelled, with London and the south of the country the main beneficiary.
Migration as been one of the biggest issues for the UK, with last June’s Brexit vote heavily influenced by the increase in immigration in recent years.
[visualizer id=”1791″](Source: GlobalData analysis and projections on WTO data)
- UK trade is expected to almost double by 2025 however there is mounting concern over future growth as a result of last June’s vote to quit the European Union.
- On Sunday prime minister Theresa May said the UK cannot expect to hold on to “bits” of its membership after leaving the EU. The prime minister’s comment came after she was asked whether she would “prioritise” controlling immigration over staying in the single market.
