China is already the largest trading partner for the Middle East, North Africa and Turkey (MENAT) region, with annual two-way trade worth around $300bn, according to HSBC.
“As the world emerges from the Covid-19 pandemic, we only expect the scale of this trading corridor to grow at pace as companies from these two markets – which are home to some of the world’s most dynamic economies – look to build back better,” noted Daniel Howlett, Regional Head (Commercial Banking) at HSBC, Middle East, North Africa & Turkey (MENAT).
Neither the Covid-19 pandemic nor geopolitical tensions have dimmed China’s attraction as both a destination market and a key player in global supply chains. In fact, an overwhelming number of businesses say they will increase the proportion of their China-based supply chains, HSBC said.
A survey of some 1,100 companies across 11 key markets across the world – ‘HSBC’s Navigator: Growing with China’ showed China’s pivotal role in global supply chains has proven durable. The survey shows that, contrary to some commentary or rhetoric, many companies are in fact increasing their exposure to the country.
Some 75% of companies said they expect to increase their supply-chain footprint in China over the next two years. Among the biggest reasons are increasing speed to market and China’s growing consumer demand.
Stuart Tait, Regional Head of Commercial Banking for Asia-Pacific at HSBC, said: “China remains a key supply chain hub for international corporates. While other markets have become more competitive in areas such as labour costs, they are yet to reproduce the sophisticated ecosystem that has developed in the mainland. Because China’s consumer market is growing by the minute, more international companies are adopting an in-China-for-China strategy whereby they produce goods for Chinese consumers.”