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Emerging Asia optimistic about long-term global trade

Emerging Asia optimistic about long-term global trade

Business professionals in emerging Asia are more confident about global trade improving in the long term compared to those in the developed world, according to a new survey published by finance and media giant Bloomberg.

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By Jackson Lewis 23.10.2018

Business professionals in emerging Asia are more confident about global trade improving in the long term compared to those in the developed world, according to a new survey published by finance and media giant Bloomberg.

Amid ongoing US-China trade tensions and a pivot away from free trade toward protectionist strategies, there have been concerns that global economic growth could stutter, but developing countries in Asia appear ready to make the most of the changing world order and are optimistic that trade will improve by the early to mid-2020s.

A sizeable 63% of the business professionals from developing nations surveyed said that they expect to see an uptick in global trade in five years’ time. However, emerging Asia is even more bullish, with 80% of respondents in Thailand expecting an improvement, closely followed by the Philippines (76%) and Indonesia (74%). Two-thirds of Chinese respondents are also optimistic.

While emerging Asia has benefited to a certain degree from the US-China standoff as the world’s two biggest economies look to other trading partners, developed markets are more worried about lingering tensions. Just 36% of business professionals in these countries said that they expect the global trade outlook to improve by 2023.

"One of the striking findings from the survey is the divergence between optimism about the global trade outlook in emerging markets and pessimism in developed economies," Bloomberg Chief Economist Tom Orlik said. "This suggests that, for emerging markets, the costs of the current slide towards a trade war could be less than expected. If businesses retain that fundamental optimism about the outlook for trade, continued hiring and investment could propel growth forward, even as tariff barriers rise."

Developed nations are more cautious, but 74% of all respondents still expect the global trade system to return to the status quo before the recent trade feuds. However, the majority admit that scenario is unlikely in the short to medium term. Overall, 50% believe that there will be greater opportunities for global trade in five years’ time.

Bloomberg polled the opinions of 2,000 professionals around the globe in the run-up to the inaugural New Economy Forum, which will take place in early November in Singapore. The host country is not as confident about the long-term outlook, as 27% of respondents expect a downturn in trade by 2023.

The survey also highlighted a trend among emerging markets to do more to be ready for any potential changes in trade systems and relationships. Two-thirds said they are already learning new technology to take advantage of new opportunities. Developed markets are way behind in this regard.

More than half of respondents in emerging countries are also taking on more professional courses and focusing on upskilling. These nations also recognize the importance of embracing fresh business ventures and implementing measures that consider the impact on the environment. In terms of addressing global challenges, 75% of all respondents said that world leaders and governments should be responsible for producing initiatives that work.

"The New Economy survey provides a barometer into public sentiment towards a world economy in transition, a key theme which we will explore at the New Economy Forum in Singapore next month," Bloomberg Media Group Chief Executive Officer Justin Smith said. "The survey reveals vast differences in perceptions for the future and highlights the need to bring together global leaders in business and government to find private-sector led solutions to some of the world's biggest challenges."

As an interesting final note, 86% of respondents said that China would be one of the three leading economic powerhouses within the next decade, putting it ahead of the United States (70%).

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