Recent Release | 19 Jan 2024

The Deglobalisation Myth: How Asia’s supply chains are changing

Macro Consulting Team

Oxford Economics

Asian worker in factory, supply chain

Global supply chains have continued to expand, despite talk of deglobalisation and nearshoring. Analysing bilateral flows of trade in intermediate goods (IG), we find that global IG exports have grown by 6% a year between 2018 and 2022. Outside of some specific cases such as US-Mexico, regional-shoring is not yet present at the global level.

Asia’s supply chains are changing rapidly. We also find evidence of China’s decoupling – but only with US and Japan. In contrast, China has actually became more important for international supply chain in major Group of 7 economies. Outside the top 3 regional players (China, Japan and Korea), several Asian countries are emerging as “hotspots” of supply-chain trade growth. In particular, Vietnam and Indonesia registered double-digit growth in annual intermediate goods exports during this period.

There are more than one winning formula in this regional reconfiguration process. Economic offering matters and we found three archetypes of hotspot countries.

Also, economies don’t have to choose in this China-US decoupling. In fact, Vietnam and Taiwan became a lot more important for supply chains of both the US and China during this period.

To download the report, please complete the form below.

The experts behind the research

Our Macro Consulting team are world leaders in quantitative economic analysis, working with clients around the globe and across sectors to build models, forecast markets and evaluate interventions using state-of-the art techniques. Lead consultant on this project was:

Thang Nguyen-Quoc

Lead Economist, Macro Consulting

Read the report

Complete the form below to download the report.

Recent reports on supply chains

Enabling North American Graphite Growth

This report explores the global graphite market, rationales for trade action on Chinese graphite, and the history of Section 301 tariffs on US imports of graphite anode material from China.

Find Out More
Eurozone: How shipping disruption is affecting inflation and rate cuts

Disruption to shipping through the Red Sea now looks likely to keep transport costs elevated at least for the next few months. We estimate this will result in a peak lift of 0.3ppts to eurozone headline and 0.4ppts to core inflation in 2024, with the brunt of the impact coming in H2.

Find Out More
Global Industry: Red sea attacks are a shot across the bow of global logistics

The attacks on container ships by Houthi militants have, once again, revealed the underlying fragility of the international supply chains upon which the global economy relies. The longer the attacks go on and the more ocean freight carriers decide to avoid transit through the Suez Canal, the greater the disruptive effects will end up being.

Find Out More
Red Sea shipping attacks add to inflation risks

We assume the disruption to shipping caused by maritime attacks on commercial vessels in the Red Sea will be relatively short-lived and the recent spike in sea freight prices will reverse. While there will be near-term impacts for some firms and sectors, these won’t be enough to shift our baseline economic or inflation forecasts to any meaningful extent.

Find Out More