International trade has always been in a constant state of flux, evolving with internal and external stimuli. But significant changes emerged due to the pandemic, revolutionising global supply chain management. To keep up with the new developments, learn the three key trends in trade.
Trading and operating overseas has been rapidly evolving, getting even more complicated with every slight change. Its capricious nature often means shock ripples extend beyond the supply chain management industry, affecting other aspects of the economy. This has been apparent in the last couple of years, where external factors, such as the pandemic or geopolitical conflicts have hindered economic growth and technological progress. This effectively presents enterprises with both challenges and opportunities.
In order to not fall behind, understanding the trade environment is imperative for the Australian business community. To better secure your business’s future, here are three current global trends that you should keep an eye out for.
1. China is close to becoming the world’s top importer
When it first joined the World Trade Organisation back in 2001, China was already one of the world’s biggest importers. This has led to a somewhat liberalised trade environment. Alongside with its sheer population size, it is only a matter of time before it becomes the world’s biggest importer, overtaking the US, the country currently holding the leading position. In fact, in 2020, the two countries were almost on par with each other – the US had imported US$2.33 trillion worth of goods, whereas China had US$2.06 trillion. If this trend continues, which is very likely, we will soon welcome China as the biggest importer in the world.
2. Inflation is not just ‘transitory’
COVID-19 has undoubtedly transformed all aspects of global trade, but when it comes to the economy, experts warn of an inflexion point. The work-from-home economy and the slow-but-sure resumed industrial activity have generated a booming demand for power around the world, which will only drive up the prices for all types of goods and services. For one, within the first half of 2021, China’s gas demand saw a 16% rise. This will naturally lead to an increase in price for a variety of goods that require natural gas in its production. Unfortunately, a wave of inflation is likely to continue into 2022, which will eventually bleed into foreign trade.
3. Digitalisation is accelerating
The prevalence of lockdowns has given way to a work-from-home transition, and home workers have been buying computers and other gear to transform their homes into offices. This has led to an increase in global internet traffic, which is estimated to be more than 3 zettabytes (3 trillion gigabytes), and this will only continue to grow. This offers substantial new opportunities for Australian companies, no matter the size or sector, to further streamline and optimise their operations. It will drive competition in a host of industries, from healthcare and education to logistical operations and artificial intelligence (AI).
That said, the prevalence of rapid digitalisation has prompted governments to also ramp up their data governance measures, extending far beyond the traditional privacy regulations that are already in place. Unfortunately, such measures may include data-localisation procedures, which may undermine growth as well as block the emergence of entire industries. There have been steps to stop this proliferation of new digital trade barriers and digital trade agreements among countries will be much more common.
Partner with DHL Express to be on the right side of these trends
These recent trends in international trade will have huge implications for global businesses in 2022 and beyond. It is important that you keep abreast of all the emerging trends to ensure that your business can take global strides and achieve your business objectives. At DHL Express, we can help you do just that. Reach new markets and watch your business grow when you leverage our global delivery network spanning more than 220 countries. Plus, we also boast door-to-door shipment visibility and specialised e-commerce solutions to ensure that your next shipment is delivered in the safest manner possible. Explore our online resources to better plan your logistics strategy.
