The rise of China’s domestic consumption and e-commerce marking the transition to a digitally-enabled mass-consumer market is continuing to fuel GDP growth despite the impact of the US-China trade dispute, according to September data from the DHL Global Trade Barometer.
The DHL Global Trade Barometer, an early indicator of global trade developments calculated using Artificial Intelligence and Big Data, shows that China’s overall index decreased from 63 to 59 compared to June, but trade growth remains positive with global trade predicted to continue its growth over the next three months despite slight losses in momentum.
In the Global Trade Barometer methodology, an index value above 50 indicates positive growth, while values below 50 indicate contraction.
Most of the China’s subdued growth will likely stem from air imports of chemicals & products, capital equipment, machinery parts, consumer fashion goods and temperature or climate controlled goods, DHL notes.
“With the rise of domestic consumption and e-commerce platforms in China, consumer spending is expected to drive the country’s gross domestic product growth despite ongoing uncertainty in its global trade relations,” said Steve Huang, CEO, DHL Global Forwarding Greater China.
“Domestic consumption contributed almost 80 per cent of GDP growth in the first half of 2018, an increase of more than half the year before. As such, we’re beginning to see the effects of China’s economic transition towards becoming a digitally-enabled mass-consumer market, even as trade continues for raw materials necessary to their manufacture.”
The Barometer’s results also suggest that despite intensifying global trade disputes, mainly between China and the US, world trade is expected to grow over the next three months albeit at a slower pace.
The growth outlook looks positive for all Asia Pacific countries with India leading the ranks, along with optimistic outlooks for South Korea, China, and Japan. This is testament to the Asian economy’s growth, especially in the areas of technology and manufacturing, DHL says.
Developed jointly by DHL and Accenture, the DHL Global Trade Barometer provides a quarterly outlook on future trade, taking into consideration the import and export data of seven large economies: China, South Korea, Germany, India, Japan, the United Kingdom, and the United States.
Together, these countries account for 75 per cent of world trade, making their aggregated data an effective bellwether for near-term predictions on global trade. The DHL Global Trade Barometer, which assesses commodities that serve as the basis for further industrial production, predicts that global trade will continue to grow in the next three months, despite slight losses in momentum.