Hong Kong SAR Achieves Top 10 Global Connectedness, Leading In Trade And FDI

The latest findings from the DHL Global Connectedness Report 2024, a collaborative effort between DHL and New York University's Stern School of Business, have been released, showcasing that globalization has surged to its highest point ever. This comes despite the hurdles posed by the Covid-19 pandemic and ongoing geopolitical tensions. The report, which scrutinizes international trade, capital, information, and people flows across 181 economies, underscores the pivotal role of trade growth in propelling global connectedness to new heights.

Hong Kong SAR, China, has experienced a slight dip in its global ranking, now positioned at 10th out of 181 economies, a four-place decline since 2017. Despite this shift, Hong Kong's prominence in merchandise trade depth is unmatched, securing the top spot for both exports and imports. Furthermore, it leads in FDI flows depth for both inward and outward investments. This reinforces Hong Kong's critical function as a conduit between Mainland China and the global market. Notably, Mainland China emerges as Hong Kong's most significant connection, followed by the United States and the United Kingdom.

The share of global output traded internationally reached an all-time high in 2022, highlighting trade's essential contribution to global connectedness. Although a deceleration was observed in 2023, projections indicate an upswing in trade growth for 2024. The report also sheds light on the stagnation in information flows growth due to a decline in research collaboration between the U.S. and China. Meanwhile, corporate globalization is on an upward trajectory with companies increasingly expanding their international footprint and boosting overseas sales.

Regional Connections and Trends

The Asia Pacific region demonstrates robust interconnectivity among its markets, with over 70 percent of countries within the region maintaining strong ties with their Asian neighbors. Additionally, many of these countries count either the United States or the United Kingdom among their top 10 connections. The report also points to a noticeable reduction in U.S.-China relations since 2016, with both nations experiencing a roughly one-quarter decrease in their mutual flows. Conversely, Russia has seen a significant decline in connectedness following its disengagement from Europe.

Globalization Versus Regionalization

Singapore is heralded as the most globalized country, with the Netherlands and Ireland following closely behind. An overwhelming majority of economies, totaling 143, have seen an uptick in their global connectedness levels, while only 38 have witnessed a downturn. Europe stands out as the most globally connected region, succeeded by North America and then the Middle East & North Africa. Contrary to the anticipated shift towards regionalization, the report reveals that most international flows are occurring over stable or even longer distances rather than within major geographic regions—with North America being an exception through its trend towards more regionalized trade patterns.

The comprehensive analysis presented in the DHL Global Connectedness Report 2024 is based on nearly nine million data points covering almost all of the world's GDP and population. It highlights the critical importance of embracing globalization for a promising future and fostering an interconnected world ready for further expansion.