— Singapore ranks third most connected economy in the world – only non-European country in the top 10
— Top 25 achievers include Hong Kong SAR 11, Korea 13, Taiwan 18, Thailand 19 and Malaysia 21
— Economic center of gravity shifts further eastward as 140-country index reveals global connectedness in recovery
SINGAPORE, Jan. 14, 2015 /PRNewswire/ — DHL, the global logistics leader, has released the third edition of its Global Connectedness Index (GCI) revealing a recovery in global connectedness to pre-financial crisis levels and ranking five Southeast Asian economies – Malaysia, Vietnam, Cambodia, Hong Kong SAR, and Singapore – as top global connectedness outperformers relative to their size and levels of economic development.
The report, a detailed analysis of 140 countries, measures depth and breadth of connectedness by cross-border flows of trade, capital, information and people.
Ranked third in the GCI, Singapore is a regional leader and the only non-European country in the top 10. It earns its top rank primarily because of the depth of its international integration relative to the size of its domestic economy.
Other top 50 ranked performers include Hong Kong SAR at 11, Korea at 13, Taiwan at 18, Thailand at 19, Malaysia at 21, New Zealand at 31, Australia at 32, Vietnam at 33, Japan at 40, and Cambodia at 48. China is ranked at 84, India at 71 and Indonesia at 111. Japan and Korea continue to be ranked in the top 10 countries on the breadth dimension of global connectedness, which measures how broadly the international component of a given type of activity is distributed across countries.
Five Southeast Asian economies – Malaysia, Vietnam, Cambodia, Hong Kong SAR, and Singapore – stand out for their high depth scores relative to the structural characteristics of their size and level of economic development. The GCI notes that countries in this region have particularly high trade pillar scores reflecting their integration into cross-country supply chains as well as national policies that have boosted their depth scores. The performance of Cambodia and Vietnam are particularly striking as both are lower middle-income countries.
Data also shows that emerging countries are now involved in the majority of international interactions whereas before 2010, the majority of international flows were from one advanced economy to another. Advanced economies have not kept up with this shift. This suggests that they may be missing out on growth opportunities in emerging markets. "Counteracting this trend would require more companies in advanced economies to boost their capacity to tap into faraway growth," said Professor Pankaj Ghemawat, co-author of the report and internationally acclaimed globalization expert and business strategist. "This is particularly evident in light of the fact that a decades-long trend toward trade regionalization has gone into reverse."
Jerry Hsu, CEO, DHL Express Asia Pacific, said, "What is interesting from the latest GCI study is the finding that the economic center of gravity will likely be between China and India by 2050. DHL Express’ ongoing investments across the region – from network enhancements to the most recent launch of the first Intra-Asia Express flight – will enable us to be ready for this future shift of economic activity."
As a region, East Asia and Pacific is ranked third in terms of levels of overall global connectedness, showing balanced strength across both depth and breadth. It performed strongest in the pillars of trade and information where it is ranked the number two region, achieving the largest gain in share of world exports.
Kelvin Leung, CEO, DHL Global Forwarding Asia Pacific, said, "The 2014 GCI report indicates Asian economies could benefit from increasing focus on their neighbors. Our role is to facilitate international and regional interactions as we extend our China–Europe multimodal network to more Asian cities starting with Tokyo, Nagoya, Osaka and Hakata in Japan."
The region is also resilient against the global trend of shrinking regionalization and continued its three decade-long shift toward more intra-regional trade. Oscar de Bok, CEO, DHL Supply Chain Asia Pacific, commented, "Asian economies stand out for their high international connectedness scores. We have responded to these increased logistics demands by making significant investment into state-of-the-art logistics centers across the region with the most recent ones being the 90,000 sqm Advanced Regional Center in Singapore with innovative automated solutions and the 92,000 sqm Integrated Logistics Centre in Kuala Lumpur, Malaysia."
The GCI 2014 study contains 140 country profiles and custom maps of countries’ trade flows. It also includes groundbreaking visualizations of global flows, developed with experts from the Georgia Institute of Technology.
Note to editors:
The 2014 DHL GCI report was commissioned by DHL and prepared by Pankaj Ghemawat (Professor at New York University Stern School of Business and at IESE Business School in Barcelona, Spain) together with Steven A. Altman (Senior Research Associate and Lecturer in Strategic Management at IESE Business School). The Index draws on more than 1 million data points from international flows covering trade, capital, information and people accumulated over the last nine years. The ranking encompasses 99% of the world’s GDP and 95% of the world’s population.
Drawing on over one million data points from 2005 to 2013, the DHL GCI paints the most comprehensive 3-D picture of the state of globalization today measuring both the depth of those connections and the breadth or number of those connections around the world.
The report and supplemental background information can be downloaded at www.dhl.com/GCI.
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