Nov 7, 2022Arguable the epicentre of one of the first waves of globalisation, linking markets from East to West, Central Asia has a long and storied history of trade. In China, this dates back to, at least, the country’s Han Dynasty in 206 BCE, with the country’s original Silk Road forging trade networks across Central Asian nations and beyond, with some routes covering thousands of miles into Europe.
This early trade route sparked a boom in wealth, as goods and culture were moved between nations. China would send silk, spices and minerals to the West, receiving glass, precious metals and other items in return. In modern times, airfreight has sped up the movement of goods and cemented China’s role in international trade. That was evident during the pandemic, when the country played a critical role in supplying PPE around the globe, as well as how it has long served as a key manufacturing hub for companies around the globe.
While there has been fluctuations in trade volumes over time, with numerous challenges and hurdles impacting routes, trends show that China is playing an increasingly important role in international trade due to the rapid expansion of the e-commerce market.
As the first country to impose lockdown restrictions following the outbreak of the Covid pandemic, with some of those measures only recently being lifted, China has been particularly impacted by the virus over the past few years. Businesses have been forced to cut back their activities, people have been unable to work as they used to and companies around the globe have had to reconsider how they operate around the tricky environment in China and surrounding countries that adopted tough restrictions.
Earlier in 2022, China recorded its weakest level of export growth since June 2020, as lingering Covid rules continued to take their toll on the country’s trade. Prolonged lockdowns have prevented the country’s major economic hubs from reaching the momentum that they are truly capable of, as the virus remains a problem for the country, while other nations return to normality.
Major trade hub, Shanghai, for example, battled one of the country’s worst outbreaks of Covid at the start of the year since the pandemic began. This resulted in substantial disruption and delays, hitting transport and logistics networks, sending waves that rippled throughout the global supply chain.
Export growth has been a significant driver of the Chinese economy but continued pressure from Covid risks that. Not only does China have to contend with other Asian nations having removed restrictions taking trade away from Beijing, there has been a weakening in global demand from the West, as soaring inflation and a cost-of- living crisis hits purchasing power.