Companies are increasingly looking to do business within their own regions as uncertainties batter the global trading system, a HSBC survey found.
“Intra-Asia trade is equivalent to Asia’s trade with North America and Europe combined and what we’re seeing, perhaps, is a slight shift with supply chains and a shift in emphasis on intra-regional trade,” said Stuart Tait, HSBC’s head of commercial banking for Asia Pacific.
“Asia’s becoming more connected,” Tait told CNBC at the China International Import Expo in Shanghai.
The survey of over 8,500 companies found that 63 percent of firms indicated that political headwinds were gaining strength with governments becoming more protective of their home economies. The poll was conducted in August and September.
Survey results indicated that the percentage of North American and European firms citing Asia as a top target for future trade growth fell from the first quarter of the year. Asian companies citing North America as a target for further growth also slipped.
In contrast, more North American companies planned to trade within their home region in the next three to five years. More companies in Asia Pacific were looking at China, specifically, as a future growth market.
The trend in regional trade connectivity has been “beneficial for China overall,” Tait said.
Chinese companies have in recent years moved to manufacture and sell in emerging countries in the region, he added.