Shifting trade corridors will redefine the global economy

By Eric Robertsen, Global Head of Research at Standard Chartered

At the Standard Chartered Lunar New Year Forum and Celebration, held in London on Thursday 13 February, Eric Robertsen shared his insights into the geopolitical challenges and opportunities created by shifting global trade corridors and Trump’s return to power, and how this will play out globally and within Asia in 2025 and beyond.

We live in an increasingly geopolitically charged world, shaped by narratives of deglobalisation, bifurcation, economic and political uncertainty and unpredictable political leadership. Yet hidden under this façade of doom and gloom is a silver lining: shifting global trade corridors are creating new and exciting opportunities worldwide. How this dynamic plays out will redefine globalisation as we know it.

Evolving trade corridors are redefining globalisation

The world is not experiencing a deglobalisation but rather a new form of globalisation, driven by shifting global trade corridors among emerging markets. Indeed, according to the IMF, total trade among emerging market partners has increased to nearly 50%, while non-oil trade exports between the Gulf Cooperation Council (GCC) and Asia grew by 13-15% annually over the past five years. The traditional “Asia to Europe and/or the US” model is steadily being replaced by an interconnected “Trade Crescent” spanning Asia and the Middle East.

This phenomenon could be further accelerated should Trump’s threats of 60% tariffs on imports from China come to fruition. While unlikely, this scenario could halve Chinese growth, shrinking exports by 65%. The key question is where those exports go – the answer lies in Asia, the Middle East, and Eastern Europe. Trade will not vanish, it will simply reroute, albeit at a lower value.

For investors, agility is key. As these emerging trade corridors become more prevalent, businesses that pivot quickly will be best positioned to capitalise on new opportunities.

China is playing the long game in its economic recovery

China has experienced significant economic growth over the past 15 years, and a slower pace of activity following this period is completely natural. China’s predicted growth rate of 4.5 to 5% should be healthy and sustainable, particularly as it shifts towards a model of high-quality, long-term growth rather than short term, stimulus-driven expansion.

However, China’s leadership is biding its time. Trump’s re-election and unpredictable policies are heightening geopolitical uncertainty. China is in “wait-and-see mode” when it comes to the impact of Trump’s actions – whether in the form of tariffs or geo-strategic conflicts – before responding. China’s stimulus policy response, once introduced, will be different from those of the past two years, and investors and corporates should pay attention.

The dollar continues to dominate

While central and global banks have been reducing their dollar holdings, the rise of de-dollarisation is overstated. Within the global payments system, the dollar dominates, accounting for 49.1% of total payments handled by SWIFT and it is the main currency of choice for international trade.

International usage of Chinese yuan (RMB) is rising, though not on SWIFT. Instead, transactions are taking place on China’s parallel payment networks, such as China’s Cross-Border Interbank Payment System (CIPS), which connects China’s trading partners in the Middle East, Asia and Africa. While these two ecosystems can co-exist, it is important to have interconnecting institutions that understand this landscape and can therefore help investors and corporates utilise these various parallel payment networks to maximise global opportunities.

Resource nationalism is on the rise

Governments with natural resources are increasingly using them as a bargaining chip – whether to gain trade advantages, extract economic benefits or wield political leverage. This approach is also being adopted by central banks and sovereign wealth funds, which are operating more strategically in order to prioritise their domestic interests through investments in local markets. This resource nationalism will see the cost of key commodities increase, impacting industries reliant on energy and rare earth minerals in particular. Businesses should prepare for supply chain disruptions and higher input costs over the next few years.

A world in flux, but not in decline

Despite the turbulence in global geopolitics, the overarching theme is one of adaptation rather than retreat. New trade corridors, financial realignments, and strategic resource policies are reshaping the economic landscape. The businesses, investors, and governments who understand and respond to these shifts will be best positioned to thrive in the new era of reglobalisation.