The bad news is that this year will not be a good one, and probably not next year, either. The good news is that the future is so bright HSBC’s trade analysts have all flipped down their welding helmets.
It is difficult not to be gloomy when every TV network and business newspaper in the world is filled with despairing reports on the great Euro Sovereign Debt Meltdown Crash and the audacity of US consumers to pare down debt instead of spending recklessly.
Then just as you prepare to flee the country and move in with a San community in the Kalahari, along comes HSBC with a day-saving global trade forecast.
Sure, the Hong Kong bank says from the rarified atmosphere of its mist-shrouded tower that looms over Central, this year and the next will be hard, but from 2014 on it will be party time, especially here in Asia.
Tasked with delivering this message of hope to Hong Kong’s jaded but attractive press corps was HSBC’s regional head of global trade and receivables finance Simon Constantinides. He reckons that from 2014 onwards, Asia Pacific trade will accelerate like a roadrunner, consistently outperforming the global average with the gap widening over the next 15 years. The respective growth in Asia and the world will be 120 percent and 86 percent, incredible numbers by any measure.
And the happiness will not stop at 2026, either, said Constantinides. Or as he put it, “We are not putting a stake in the ground and saying that at 2026, that’s it. The solid rebound will start in 2014 and continue.”
The forecast had China’s share of global trade in the next 15 years increasing from 9.82 percent in 2011 to 12.3 percent, and India’s from 1.73 percent to 2.25 percent. Trade growth in China will substantially outpace global trade.
Interestingly, among Asia Pacific’s top 10 import-export partners, eight are from the region. This supports the findings that intra-regional activity will develop further and be a driver of global trade in the next five years.
The bank also predicted that China would overtake US as the world’s largest trading nation by 2016, although there are no real surprises there.
In a second forecast that was released in Hong Kong yesterday, the outlook for transportation and logistics in Asia Pacific was equally rosy, according to market researcher Frost & Sullivan.
It its Asia Pacific Logistics Industry Outlook, vice-president and country head, Asia Pacific, R Gopal predicted the CAGR for the sector from 2011 to 2016 would be 7.6 percent. The transportation and logistics market in China would grow by 9.5 percent, India by eight percent and Indonesia by 14.7 percent.
The findings of both forecasts reveal that the underlying fundamentals of the global economy are sound, and also that Asia Pacific will lead world trade in the future, driven by China and India and supported by the developing economies.
Both reports were a refreshing deviation from the gloomy predictions that make following the news such a depressing exercise. There should be a moratorium on bad news in winter.