China will overtake US by 2030

FOLLOWING the record-breaking 14.5 per cent surge in the volume of exports in 2010, world trade growth should settle to a more modest 6.5 per cent expansion in 2011.

The sharp rise in trade volumes last year enabled world trade to recover to its pre-crisis level but its projected long-term forecasts are still grim. World Trade Organization (WTO) economists believe the recent series of important events around the world lend a greater degree of uncertainty to any forecast.

“The figures show how trade has helped the world escape recession in 2010,” WTO’s director general Pascal Lamy said. “However, the hangover from the financial crisis is still with us. High unemployment in developed economies and sharp belt-tightening in Europe will keep fuelling protectionist pressures. WTO members must continue to be vigilant and resist these pressures and to work toward opening markets rather than closing them. ‘Stability’ should be the name of the game for 2011.”

For 2011, the more modest 6.5 per cent increase is linked with uncertainty about the impact of the civil unrest in the Middle East and the earthquake and tsunami in Japan.

Looking further into the future, it is predicted that China will overtake the US and, with other emerging economies, dominate global trade by 2030, according to a PwC report.

The report suggests that there will be four major developments that will affect the air cargo industry and world trade: increasing trade within the Asia-Pacific region; that between emerging and developed economies, such as between China and Germany; between emerging economies, such as parts of Asia and Latin America; and between China and Africa.

Yael Selfin, head of macro consulting at PwC, said: “Transport and logistics companies will need to adapt to the change in trade patterns to ensure they maximise their profit opportunities.”

Klaus-Dieter Ruske, PwC Global transport and logistic leader, said: “Long-term planning and careful execution are essential when entering new markets. Companies should not only think about securing deals and developing operations, but also about testing opportunities and safeguarding their assets, whether physical, human or intellectual. Economic and political stability, varying business regulations, possible inflation, and competition among countries are also factors to consider when assessing market entry.”

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