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Who's more optimistic about global trade? Surprisingly, it's emerging markets
BUSINESS professionals in developing countries are surprisingly more optimistic about the global trade outlook than those in the developed world, a Bloomberg survey found.
Despite rising protectionist sentiment and US-China tensions, more than three in five (63 per cent) business professionals from emerging markets say they believe there will be more global trade in five years’ time. That view is especially pronounced among respondents from China (66 per cent), India (71 per cent), Indonesia (74 per cent), the Philippines (76 per cent) and Thailand (80 per cent).
This contrasts with the view of those from developed markets, where just over one-third (36 per cent) expect more global trade in five years.
Bloomberg chief economist Tom Orlik said: "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. 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."
Overall, the large majority (74 per cent) believe the global system of trade can be restored, but only in the long term, with just half seeing more global trade in five years' time.
As for Singapore, business professionals here are a more pessimistic bunch with just 63 per cent believing the global trading system can be restored in the long term and 27 per cent saying there will be less trade in five years’ time, the second-highest rate in the survey and compared to only 18 per cent of global respondents.
Business professionals in developing countries are also more motivated to prepare for the future than their developed-world counterparts. Sixty-six per cent of respondents from emerging markets reported that they are learning new technologies compared to 43 per cent in developed markets, 56 per cent are upskilling and taking additional professional courses compared to 29 per cent in developed markets.
They also recognise the need to start new business ventures (35 per cent) and to be more socially conscious about the environment (50 per cent), as compared to respondents from developed countries (10 per cent and 37 per cent, respectively).
When asked to predict which countries will be the top three economic powerhouses in 10 years’ time, the majority of the survey's respondents chose China (86 per cent), followed by the US (70 per cent) and Japan (36 per cent).
Bloomberg's "New Economy" survey of 2,000 business professionals in 20 markets was conducted in advance of its inaugural New Economy Forum to be held in Singapore on Nov 6 and 7 and hosted by founder Michael Bloomberg.
"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,” said Justin Smith, chief executive officer, Bloomberg Media Group.
“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,” he said.
Global governance was identified in the survey as the most critical global challenge requiring action. This sentiment was especially strong among respondents from India, the Philippines, Malaysia and the Middle East.
Yet, despite that expressed lack of confidence in government leadership, three-quarters of respondents across the globe said they believe that world leaders and governments should be the primary force in driving initiatives to overcome global challenges. Only 10 per cent of respondents think that businesses and the private sector should take the lead to address today’s global challenges.
But the private sector has no choice but to tackle the issues arising from the emerging economic order, because governments are failing to act, said Mr Smith.
“We think that private sector businesses must take greater leadership in addressing key global challenges,” he said.