These Five Countries Are Holding Up Global Economy With $4 Trillion Contribution Amid US-China Tensions

Amid escalating tensions between the U.S. and China, a group of five nations has emerged as significant connectors in the fragmenting global economy. These countries are Vietnam, Poland, Mexico, Morocco, and Indonesia.

These nations have been identified as crucial links due to their strategic geographic locations and their ability to facilitate trade, reported Bloomberg. Together, these countries accounted for $4 trillion in economic output in 2022. This figure surpasses India and stands almost on par with Germany and Japan.

Despite their differing political backgrounds and histories, these countries share a common goal of capitalizing on the economic opportunities arising from their positioning between the U.S. and China. They represent 4% of the global GDP, yet they’ve attracted over 10%, or $550 billion, of all greenfield investment since 2017.

See Also: Nasdaq, S&P 500 Set For Weaker Open: What’s Dragging Stock Futures?

The Bank of International Settlements’ economists have found that supply chains are expanding as other countries, particularly in Asia, become additional stops in trade between China and the U.S. Companies are shifting supply chains away from China and towards countries with economies that are already closely integrated with China, such as Vietnam.

However, it is not all positive. Economists warn that this shift could lead to a negative impact on global growth, with poorer nations suffering more than wealthier ones. Additionally, the reshuffling of supply chains could result in higher production costs leading to increased inflation.

Regardless, these connectors serve as evidence that globalization isn’t ending. Instead, goods and capital are crossing even more borders than before.

Read Next: Why Nasdaq, S&P 500 Futures Are Sliding Today

Photo Via Shutterstock