Home > Trends and perspectives > The reaction of supply chains to the crisis: the shifts of global trade flows

The reaction of supply chains to the crisis: the shifts of global trade flows

As a reaction to the global crisis, supply chains are changing their geography. The traditional western markets are not recovering from the crisis and seems that their economies are following a W or L-shape pattern rather than the expected V-shape. Because of that, global supply chains are shifting to other markets, and the so called South-South trades are increasing. If we look at the table (2010 WTO data of merchandise trade), we can see that the higher flows still occur from Asia to Europe and North America (about 1.6 trillion dollars) and vice versa (about 800 billion dollars). China accounts two thirds of these flows. However, looking at the difference between 2008 and 2010 (only two years) we can see that the  flows from Asia to Europe and North America have been quite stable. All the other flows directed to North America and Europe have decreased more than 5% (for instance from South and Central America or Africa). On the other side, all the flows directed to Asia increased more than 5%, except from Middle East that has intensified the exchanges with South and Central America. Also the exchanges from Asia to South and Central America and to Africa have increased more than 5%. It will be interesting to follow the trend as soon as 2011 data will be released. So far, looks like Asia represents the new market where flows from every continent are directed. On the other side, Asia which is a huge manufacturing country is seeking for new markets (for instance South and Central America or Asia) to reduce the dependence from the uncertain traditional European and North American markets.

2010 merchandise trade data (WTO) – The darker the color, the greater the flow

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