Georges Elhedery

Group Chief Executive, HSBC Holdings plc

Executive Summary

Unprecedented developments impacting the global economy are creating structural shifts in the patterns of global trade. Whereas the global Covid-19 pandemic sparked a rebalancing and search for resilience in global supply chains, today Governments and businesses face a new, rapidly evolving environment.

Geostrategic competition, technological advancement, including artificial intelligence, and the transition to a new, sustainable economy are combining and driving businesses to rethink not only where they source and produce goods but also how they finance, manage, and optimise trade flows.

In this paper, we leverage our expertise as the world’s largest trade bank, with a 160-year history of connecting the world’s economies and access to 85% of global trade flows through our international network, to hone in on the five forces shaping global trade: changing geopolitics; a shift from goods to services trade; B2B platforms and e-commerce; Sustainability; and Digitalisation. These five distinct forces are individually having an impact on global trade. Together, they are overlapping and compounding with the potential to transform global industrial value chains and supply chains as we know them today.

Nowhere are these changes having a more profound impact than in China. As the world’s largest manufacturing hub and a dominant player in global trade, China is both a driver and a focal point of supply chain transformation. The country’s dual strategy of strengthening domestic industrial capabilities while expanding its influence through programmes like the Belt and Road Initiative is reshaping supply chain dynamics worldwide. At the same time, China’s push for greater self-sufficiency in critical industries, its rise as an innovation powerhouse and in green industries, alongside increasing labour costs, and regulatory shifts are changing the landscape for businesses around the world, including in China.

Banks play a critical role in this evolving landscape. As providers of trade finance, working capital, and risk management solutions, financial institutions enable companies to navigate complex supply chain disruptions and capitalise on new opportunities. The rise of digital trade platforms, regulatory demands for sustainability reporting, and new payment models are also reshaping the financialservices that support supply chains. Banks are increasingly able to provide financing solutions that support resilience, digitalisation, and sustainability whilehelping businesses manage geopolitical and regulatory risks.

Download the full report：Global Industrial Value Chains and Supply Chains