Report: International Trade and Implications for European Business

HSBC has launched a new report that provides the first complete picture of international trade for European businesses. ‘Mapping the World’s Trade Connections’ demonstrates where the key changes are taking place, where new markets and sectors are emerging across the world for European businesses to trade with and where critical developments will be in the next five to 10 years.

It is being launched alongside HSBC’s latest Trade Confidence Index, which highlights that international trade is fuelling global economic activity short term and will remain the strongest driver for growth in the next six months. Traders surveyed across 17 markets globally expect trade volumes and their trade finance requirements to increase or remain at current levels into 2011.

Europe will have a different role to play in the future, becoming known less as a consumer and more as an innovator, according to the research undertaken for HSBC by Delta Economics. It finds that Europe’s renowned leadership in cutting edge research, its strength in high value manufacturing and design and its access to ideas, innovations and networks, will see thinking businesses in Europe trading on skills not products in the future.

The report highlights that European businesses face a paradox – choosing between slow but sustainable growth in trading with other European nations or faster growth and greater opportunities with emerging markets. The report identifies rising stars on the world trade stage: Africa – notably South Africa, Vietnam and eastern Europe, which represent ‘high growth’ prospects as they are changing at pace. The opportunities for European businesses here lie in tapping into fuelling this change, for example in the short-term supporting big infrastructure development and demand for commodities.

Alan Keir, HSBC global co-head, commercial banking, said: “For the first time, we are able to provide a picture of the trade connections which are shaping world trade and indeed fuelling growth for businesses. We commissioned this report to map these connections to help companies in Europe understand how the world’s trading axis has shifted and how best they can mitigate risk and act to succeed.

“We know that trade confidence is tracking high from our latest Trade Confidence Index; each of the 17 markets surveyed were confident about trade prospects in the next six months. It also found businesses in India (55%), south east Asia (52%), South America (36%) and Europe (29%) in particular saying their need for trade finance will increase in the next six months.”

The report highlights how European businesses will need to employ different strategies depending on whom they trade with. It finds that India and China are becoming increasingly similar to Europe in terms of their trading strategies, providing more partnership opportunities for European businesses. Yet markets such as Brazil, which is highlighted as having huge untapped potential, have created their own distinct business models that companies will need to fully research and understand in order to make the most of the opportunities they afford.

Keir continued: “This report establishes a new philosophy: we’ll all be stronger if Europe is part of the picture. With ‘trade’ now focused on establishing a global supply chain, the report highlights that it is the experience, knowledge and skills that Europe boasts which gives it a critical role in world trade going forward. It is the thinking business that capitalises on both emerging and developed markets’ strengths to facilitate growth. Our presence in more emerging and developed markets than any other bank means we are ideally placed to help businesses understand and act upon these opportunities.”

These new opportunities for European businesses are already being turned into reality by many companies. HSBC’s latest Trade Confidence Index findings also out this week reveals that despite strong interest in Asian markets – more than 50% of respondents in Germany, UK and France identified Greater China as a likely trading partner in the next six months – intra-regional trade, within Europe, remains vital with significant prospects within Western Europe (Germany 93%, UK 92% and France 86%) and/or emerging Eastern Europe (Germany 95%, UK 90% and France 72%) markets.


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