DHL has released the seventh edition of the annual DHL Global Connectedness Index (GCI), which analyses international flows of trade, capital, information and people amid the spread of the COVID-19 pandemic in 2020.
This year’s edition of the GCI saw Hong Kong ranking one notch higher than last year on both its global and regional ranks, being listed as the 25th in the world in terms of its connectedness.
Hong Kong is also listed among the world’s top economies with the highest proportions of flows crossing national borders based on its depth score, calculated via the size of its international flows relative to the size of its domestic economy.
The city ranks second and is followed by Belgium, the Netherlands and Estonia. In addition to Hong Kong’s high global and regional rankings, it also ranked first on financial freedom and third in terms of ease of doing business, which are part of the structural and policy drivers of its connectedness depth.
The report indicates that economies with higher depth scores tend to be wealthy and relatively small, attributed to having limited internal markets that allow them to have a larger share of their trade, investment, communications, and even people, outside of their own borders.
“Hong Kong continues to rank high in DHL’s GCI reports amid challenges brought about by the global COVID-19 pandemic, further solidifying its status as a globally connected economy and its highly esteemed reputation as a financial, commerce and trade hub,” said Chee Choong Ng, Senior Vice President and Managing Director, DHL Express Hong Kong and Macau.
“Complementing Hong Kong’s high global connectedness and its role as a regional logistics hub are key infrastructure projects in the city such as the completion of the Three Runway System at the airport. DHL is in the midst of expanding the Central Asia Hub to meet our customers’ demands especially during these challenging times.”
The new GCI report also contains a ranking of countries that share Hong Kong’s international flow, with mainland China on top of the list with 57 percent, followed by the United States, the United Kingdom, Singapore and Japan. Asian neighbors Taiwan, Korea, Malaysia, Thailand and the Philippines make up the ranking’s latter half.
The DHL Global Connectedness Index employs more than 3.5 million data points to track the globalization of 169 countries over the period from 2001 to 2019. It measures each country’s global connectedness based both on the size of its international flows relative to the size of its domestic economy (‘depth’) and the extent to which its international flows are distributed globally or more narrowly focused (‘breadth’).
Key findings of the GCI report include:
- At the global level, current forecasts imply that the index will fall significantly in 2020 due to the distancing effects of COVID-19, such as closed borders, travel bans and grounded passenger airlines. However, it is noted that the pandemic is unlikely to send the world’s overall level of connectedness below where it stood during the 2008 – 09 global financial crisis.
- Trade, capital, and information flows have held up surprisingly well, with international trade rebounding strongly after a sharp plunge at the onset of the pandemic.
- International data flows were boosted during the pandemic as most in-person contact went online, causing an increase in international internet traffic, phone calls and e-commerce.
- The Netherlands is again at the top of the ranking as the world’s most globally connected country, followed by Singapore, Belgium, the United Arab Emirates and Ireland to make up the global top five.
- Europe grabs the top spot among the world’s most globalized regions, with 8 of the 10 most globally connected countries located in the continent. It is leading in trade and people flows while North America is found to be the top region for information and capital flows.
- The economies of Cambodia, Singapore, Vietnam and Malaysia are seen to be punching well above their weight in terms of international flows, with regional supply chains being a key factor in Southeast Asian nations’ performance.
