Concerns about a split in the global economy are greater than ever. The dispute between China and the US is radically changing global trade. Europe is stuck between the chairs and must also look for new allies.
(c) The press
Davos/Vienna. Friendship. Rarely has this word been the focus of attention at the elite meeting of the business world, the World Economic Forum in Davos, as this year. CEOs, politicians and economists fear for the future of the idea, which has brought peace and prosperity to Europe for 30 years. Pandemic, lockdowns, disrupted supply chains, the power struggle between the US and China, and last but not least, the Russian invasion of Ukraine have called the gravediggers of globalization to the scene. Is the world’s prosperity machine really dead?
A look at the data supports this conclusion, at least in part. The importance of trade in goods relative to economic output has been declining for several years. The World Trade Organization (WTO) expects only a minimal increase this year. Boston Consulting (BCG) consultants expect international trade to grow significantly slower than global economic output through 2031. Until a few years ago, globalization was still the engine of the economy. All this will also cause prices to rise even more in the coming years.
In addition, there are major changes in the structure of world trade. After bad experiences during the pandemic and energy crisis, many companies have reorganized their supply chains. The new magic word is “friendshoring”. Rather than just chasing the lowest wage costs, companies are looking for locations and suppliers in countries where they see the lowest possible risk. The problem that Europe, for example, faces: which of the former allies is still a true friend in these times? And where can new ones be found?