In the millenia-old history of trade routes, the Middle Corridor has been something of an El Dorado. Envisioned as an overland route from China’s eastern seaboard through the resource-rich expanse of Central Asia to the consumer markets of Europe, the reality was always bogged down by the failure to keep pace with maritime-driven globalization – until now. With Russia locked in sanctions and the call for resilience thrumming worldwide, policy and investor interest in a Middle Corridor has never been higher. Stewart Paterson probes how the new push for the Middle Corridor has become a petri dish for an increasingly multipolar world. Ahead of the launch of our 2024 Sustainable Trade Index in late October, the Hinrich Foundation and Switzerland’s IMD will jointly hold a launch panel on the future of industrial policy. Separately, Jason Tabarias and Samuel Hardwick write on whether industrial policy can work if trade and capital flows remain increasingly restrictive. In the global EV market, five economies account for 70% of the EV battery sales. The APEC Policy Support Unit asks: Can other Asian economies get in on the action? Alex Capri has a new book out on techno-nationalism. Plus, we unpack a key report on China’s trading status in the US, and sign up for a TradeTrust Clinic.
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The Middle Corridor: Competing for influence in Central Asia
Stewart Paterson 1 October 2024
Maps can be deceptive. Geography might suggest that the easiest way to move trade from China’s southeastern seaboard through the Eurasian land mass to Europe is right through the arid plains and ranges between Kazakhstan and Georgia. Over thousands of years, the cheaper and faster way however has always been by sea. But, with Russia locked in war and maritime trade crimped at key chokepoints worldwide, the dream of a trans-Eurasian Middle Corridor is alive again. It’s not going to be cheap, but the European Union, China, Turkiye, and Central Asia itself are betting that it will come to fruition this time. How real is the dream? Senior Research Fellow Stewart Paterson investigates.
The third edition of the Hinrich-IMD Sustainable Trade Index, to be launched on 22 October, poses a fundamental question for the future of trade: As nations race to achieve resilience, how will the opposing demands of geopolitical security and global economic integration meet? Industrial policy is centuries old and has returned in full force as superpower competition, war, and Covid stir governments to seek geoeconomic independence. But the new fragmentation carries old warnings: it is not the failure to achieve industrial policy, but its success that may be the undoing of global development. Join IMD’s Christos Cabolis, Simon Evenett, and the Hinrich Foundation’s Chuin Wei Yap and Deborah Elms as they plumb the sustainability of trade in a waning era of comparative advantage.
Balancing industrial policy and supply chain resilience was always going to be tricky, The Australian National University’s Jason Tabarias and Samuel Hardwick write. If such policies complement competition, trade and capital flows remain open, and spillovers are managed cooperatively, industrial policy could be a source of supply chain resilience. But if these policies limit competition and the spread of technology, they are likely to be a source of vulnerability.
Driving the future: Asia’s place in EV battery supply chains
APEC Policy Support Unit 1 October 2024
In the global EV market, five economies led by China account for 70% of the EV battery sales. Can other Asia-Pacific economies get in on the action? Yes, if they pay attention to what they produce that go into battery supply chains, the APEC Policy Support Unit writes in an analysis for the Hinrich Foundation. Economies that produce significant raw materials for lithium-ion batteries include Australia, Canada, Chile, Indonesia, Japan, Korea, Mexico, the Philippines, Thailand, and Vietnam. Peru is already a large producer of copper and Malaysia is ramping up battery manufacturing and recycling.
Alex Capri’s ‘Techno-Nationalism: How It’s Reshaping Trade, Geopolitics, and Society’
Hinrich Foundation Research Fellow Alex Capri’s new book, Techno-Nationalism: How It’s Reshaping Trade, Geopolitics, and Society, is a sweeping dissection of the intersection of trade, technology, geopolitics, and rising nationalism. Published earlier this month, the book wends through themes and case studies of state power, industrial revolutions, and economic statecraft, from undersea cables to outer-space satellites. Buy the book and register here for our book launch.
Learn how to make trade efficient and sustainable with Singapore’s blockchain-based paperless documentation framework TradeTrust. The TradeTrust team at Singapore’s IMDA, in collaboration with the Hinrich Foundation, is hosting a clinic on how TradeTrust can help trade practitioners and industry. The TradeTrust Clinic will be held at the Foundation’s office on Thursday, 17 October. Sign up here.
Economic implications of revoking China’s PNTR status
In recent years, US-China trade relations have shifted from contentious engagement to a phase of de-risking and decoupling. Some US policymakers are now pushing to revoke China’s permanent normal trade relations (PNTR) status, a move that could upend 25 years of economic gains and partnerships. The Peterson Institute for International Economics estimates the potential economic impact of such a decision. Explore our analysis of the report.
