DHL and New York University's Stern School of Business have released the new DHL Global Connectedness Index 2022, an in-depth report on the state of globalization and its prospects.
Analyzing data from 171 countries and territories, the report revealed how flows of trade, people, capital, and information move around the world.
The report noted that international flows have been "remarkably resilient" in the face of recent shocks such as the Covid-19 pandemic and the ongoing war between Russia and Ukraine.
After a slight decline in 2020, the composite DHL Global Connectedness Index also rose back to above pre-pandemic levels in 2021.
Data from the DHL Global Connectedness Index 2022 — which is based on over four million data points from 171 countries, accounting for 99.7% of the world's gross domestic product and 96% of its population — points to a further increase in 2022, despite slower growth in some flows.
It added that international trade in goods was 10% above pre-pandemic levels in mid-2022, and international travel remained 37% below 2019 levels in 2022 but doubled compared to 2021.
"The latest DHL Global Connectedness Index data clearly debunks the perception of globalization going into reverse gear," John Pearson, CEO of DHL Express, said during the launch. "Globalization is not just a buzzword, it's a powerful force that has transformed our world for the better."
Pearson noted that by breaking down barriers, opening up markets and creating opportunities, globalisation has enabled individuals, businesses and entire nations to flourish and thrive.
Decoupling of US-China seen
The DHL Global Connectedness Index notes that the latest data provide evidence that the US and China are "decoupling in many fields."
Looking at 11 types of trade, capital, information, and people flows (such as merchandise exports, M&A transactions, and scientific research collaboration), the share of US flows with China declined for 8 out of 11 types since 2016.
In the same period, the share of China's flows with the US decreased for 7 out of 10 types with data available for China.
The report said several of these were large declines.
"Nonetheless, the US and China are still linked by far greater flows than any other two countries that do not share a border. Further, the data shows that, so far, the decoupling between these two countries has not led to a broader fragmentation of global flows between rival blocs of countries," the report added.
There is also "no evidence of a trend towards regionalization" as the average distance of international flows increased.
Analyses in the DHL Global Connectedness Index also show that predictions of a shift from globalization to regionalization have not — at least yet — come to fruition.
"The average distance traversed by trade, capital, information, and people flows has increased over the past two decades, and trade flows even stretched out over longer distances during the Covid-19 pandemic," said Steven Altman, senior research scholar and director of the DHL Initiative on Globalization at NYU Stern's Center for the Future of Management.
"The only category that displays a clear recent shift toward regionalization is people flows. This is due to the dramatic change in travel patterns during the Covid-19 pandemic," he added, noting that it remains an open question whether trade patterns will become significantly more regionalized in the future.
"Many companies and governments are focused on nearshoring to regionalize supply chains, and there are substantial business benefits that can come from regionalization. On the other hand, more than half of all trade already happens within regions, and the benefits of long-distance trade are still important, especially as inflation remains high, economic growth has slowed, and container shipping rates have come back down," Altman added.
In the country ranking of the DHL Global Connectedness Index 2022, the Netherlands was again the most globally connected country.
Singapore ranked second overall and first in terms of the size of international relative to domestic flows.
Meanwhile, the UK has the most globally distributed flows. Among the 55 most globally connected countries, there are representatives from every world region.
Published regularly since 2011, the renowned DHL Global Connectedness Index provides reliable findings on globalization trends by analyzing 13 types of international trade, people, capital, and information flows.