China’s exports, investments to Global South surge in ‘age of tariffs’: report

China is accelerating its pivot to the Global South to reduce reliance on the United States, potentially creating “a new order of global commerce”, according to a new report.

Chinese exports to the Global South – covering most of the developing world – have doubled since 2015, with growth seeing a notable uptick after the US-China trade war during US President Donald Trump’s first term, S&P analysts said on Tuesday.

In the past five years, these exports have risen by 65 per cent – tripling the pace seen in the previous five-year period. By comparison, exports to the US and western Europe grew by just 28 per cent and 58 per cent respectively over the past decade.

“High uncertainties under US tariffs and China’s slowdown will continue to motivate Chinese firms to head to the Global South,” the S&P analysts said.

“The result could be a new order of global commerce where South-South trade becomes the new centre of gravity and Chinese multinationals emerge as the new key players.”

According to the report, China now exports about US$1.6 trillion to the Global South, more than 50 per cent higher than its combined exports to the US and western Europe at US$1 trillion.

Chinese firms have also stepped up investments in developing regions, particularly in manufacturing. Flows to the country’s four largest trading partners in Southeast Asia – Indonesia, Malaysia, Thailand and Vietnam – have quadrupled over the past decade, averaging US$8.8 billion annually.

South China Morning Post