China’s trade and investment flows with developing nations in the Global South have accelerated in recent years, according to research published by S&P Global. The report noted that Chinese goods exports to countries in Southeast Asia, Latin America, and the Middle East have doubled over the past decade, outpacing growth in shipments to the US and Western Europe.
S&P Global said the trend has strengthened over the past five years as Chinese firms increasingly seek new markets abroad and establish manufacturing hubs in sectors such as electric vehicles and electronics.
“High uncertainties under tariff pressures and China’s economic slowdown will continue to motivate Chinese firms to head to the Global South,” S&P Global economists wrote. “This could result in a new order of global commerce where South–South trade becomes a central driver, with Chinese multinationals emerging as major players.”
Recent data showed that while exports to the US declined in July for a fourth consecutive month, shipments to markets in Africa and Southeast Asia expanded, offsetting the drop. China has also taken steps to strengthen partnerships with developing nations by reducing trade barriers and signing new agreements. In June, Chinese leadership pledged to eliminate nearly all import tariffs on African nations while also engaging in discussions with Latin American and Southeast Asian leaders.
According to S&P Global, trade with China now accounts for about 20 percent of gross domestic product among its 20 largest partners in the Global South. The region also represents more than half of China’s total trade surplus. However, the report cautioned that Chinese officials may face challenges from local industries in some countries that are concerned about the impact of rising imports on domestic markets.
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