It may be a few years before China competes with the U.S. in GDP, but world trade is a different story.
We’re were struck by this chart from Citi showing how close China is to passing the U.S. in total trade: $4 trillion compared to $3.6 trillion.
By 2030 Chinese trade will be more than two times as big as America’s.
At the same time, world trade is projected to grow at a faster rate than GDP. Considering these trends, Citi recommends betting on trade-related infrastructure in emerging markets:
The CIRA economists argue that the changes in the volume, value and composition of world trade will likely drive public and private investment in trade-related infrastructure, including ports, docks, airports, roads, storage facilities, inter-modal freight transport and transshipment facilities. This will especially be the case in emerging markets where, as noted above, many new trade routes are developing.
Similarly, the OECD has pointed out that, reflecting growth in international trade, significant infrastructure investment will be required in coming decades…
Working with CIRA analysts globally, we outline below the implications of the “trade transformation” for sectors that support a trade-related infrastructure, including marine transportation, surface transportation, and air freight logistics…