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.
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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:
Lead Economist, Macro Consulting
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