Trade Academy


Next Generation Trade: Reshaping the future of global trade through digital technology

HSBC and the Hong Kong Trade Development Council (HKTDC) recently jointly hosted the ‘Next Generation Trade’ webinar, bringing together a range of experts and industry leaders to share insights on the key trends in digital trade and business digitalisation.

Boosting trade growth through digitalisation and diversified supply chains

Amid escalating trade tensions over the past few years, coupled with the impact of the pandemic on the global economy, the widespread adoption of digital technology has been creating new trends and rapidly reshaping the trade landscape. Aditya Gahlaut, Head of Global Trade and Receivables Finance at HSBC Hong Kong and Macau, noted that existing cross-border trade in services and data is experiencing significant growth – especially in the area of digitalised trade, where streamlined processes have improved efficiency and reduced costs, boosting the growth of global trade.

[Left] Aditya Gahlaut, Head of Global Trade and Receivables Finance, Hong Kong and Macau, HSBC
[Right] Benjamin Chau, Deputy Executive Director, HKTDC

Businesses are also actively adopting new strategies in this new landscape. Benjamin Chau, Deputy Executive Director of HKTDC, revealed that HKTDC has witnessed overseas buyers gradually moving away from purchasing from a centralised procurement location and towards using multiple locations in order to diversify risk, in addition to expanding online sales channels. Both of these trends are driving the adoption of digital technologies. Given the considerable progress made in a variety of Asian trade initiatives, and considering that the growth driver for global innovation is shifting towards Asia, Gahlaut and Chau both emphasised that companies should start taking notice of the growing Asian market – especially the regions that have vast potential, such as the Guangdong-Hong Kong-Macao Greater Bay Area and the ASEAN region.

Data is the key to digital transformation

During the webinar, a number of industry experts discussed how businesses can accelerate their digital transformation agendas as they adapt to this new era of digital trade.


The discussion focused on how data can make businesses more competitive. Alice Wong, Group Chief Financial Officer of Hong Kong Television Network Ltd, thinks that companies can leverage business data to identify gaps in market demand and make strategic adjustments, increasing innovation in their operations. Nick Wei, Regional Sales Director of Centric Software, said that digital technology has allowed stakeholders to establish a collaborative platform, enabling more flexible and cost-effective manufacturing and procurement processes for merchants and contributing to a green supply chain.

Shirley Kwong, Head of Business Development of Global Trade and Receivables Finance at HSBC, said that businesses can leverage the latest data from reliable third-party platforms for paperless credit assessment and monitoring processes. They can also use data to enhance the security and efficiency of those processes, noted Kwong, helping them to meet their financing needs more promptly.

The three speakers shared their tips on digital transformation in business. Wong emphasised to SMEs that the moment to adopt digitalisation is now: “Many might think that digitalisation isn’t relevant to their business, but if they stay put instead of keeping pace with change, they’re going to let a lot of opportunities slip away.”

Wei stated that businesses going through digitalisation must find the right solution: “When it comes to digitalisation, many businesses think that a set of installation systems is all they need, but it is also crucial to identify the issues they need to address across their different processes, including ordering, manufacturing, design and inventory, in order to prescribe the right solution.”

Kwong thinks that businesses undergoing digitalisation must be both bold and cautious: “SMEs need to find suitable solutions for bold adoption; then seek a reliable third party for execution.”


Revisit the webinar here


Reshaping the future of supply chains in Asia

Supply chains are evolving. The pandemic has created a challenging environment for global trade. We have conducted a bespoke supply chain survey in the middle of 2020 to gain insights from corporate treasurers and finance professionals. Watch the videos to find out more.

Survey summary

Global supply chains in transition


Funding the supply chain


Future supply chains – digital and sustainable


Building supply chains of the future

Greater Bay Area. Greater Opportunities

As connectivity continues to grow, the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) is set to bring opportunities for businesses by fostering the flow of people, goods, capital and information as well as leveraging the comparative advantages of each GBA city.

A recent seminar organised by HSBC Commercial Banking titled ‘Greater Bay Area, Greater Opportunities’ gathered a range of experts and speakers to share their insights on how GBA development can benefit different sectors across boundaries.

Note: The opinions expressed are those of the featured speakers, and except where a speaker is specifically identified as a representative of The Hongkong and Shanghai Banking Corporation Limited (‘HSBC’), do not represent HSBC’s views. The opinions are subject to change without notice and should not be constructed as a recommendation of any individual holdings or market sectors.

Trade Disputes: Optimism in the face of Protectionism

June 2018

At HSBC’s Trade Economist Seminar held in Hong Kong on 4 Jun, Douglas Lippoldt, Chief Trade Economist, Global Research, HSBC, and Robert Olson, Senior Manager in Deloitte’s Global Trade Advisory Practice in Hong Kong, held a lively discussion on the overall global trade sentiment. They also focused on the pressing issue of the trade disputes between China and the United States, as well as the effect of those disputes on the overall outlook on trade in the Asia Pacific region.

Lippoldt and Olson agreed on there being a cautious optimism on the trade outlook in the Asia Pacific region, despite concerns over rising protectionism and looming tariffs. But they also emphasised that the current trade situation is fragile and vulnerable to sudden shifts in the conditions for trade, highlighting the need for businesses to stay alert to the ongoing trade developments and be agile and adaptable.


Strong Trade Potential on the Horizon

Although the escalating trade war continues to worry businesses, 4 out of 5 firms expect continued trade growth in 2018, according to the HSBC Navigator, which presented a global business survey that polled over 6000 business representatives globally as of January. Asia-Pacific businesses showed the most optimism, with 82% of respondents expecting trade growth in 2018. Additionally, North America remains the most cited target market for growth1.

This optimism is largely driven by the enormous growth potential of the emerging markets around the world. “When you look at the assets that are available including land, labour and capital in the emerging markets, and when you consider EM demographics and prospects for technological catch up, it is clear that we could see a strong acceleration in growth, if policy permits this to emerge.” said Lippoldt.

The emerging market middle class is forecast to expand greatly. By 2050, there is expected to be an increase of 2.6 billion members of the middle class across 17 emerging markets. This rising middle class represents an important source of future demand for traded goods and services, including products from the emerging markets2.


Douglas Lippoldt, Chief Trade Economist, Global Research, HSBC


Regional Initiatives and Free Trade Agreements Fuel Optimism

Given the growth potential of emerging markets and the continuing impediments to trade along many corridors, it is clear that trade liberalisation and facilitation have an important economic role to play. In Asia, action on this front is underway via measures such as the Belt and Road Initiative and ASEAN 2025, new regional Free Trade Agreements (FTAs) including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, now undergoing ratification) and the Regional Comprehensive Economic Partnership (RCEP, under negotiation), and the growing number of bilateral accords (e.g., Sri Lanka and Singapore have just completed a new accord)..

“The Belt and Road Initiative, if fully implemented, could mobilise USD1.4 trillion worth of infrastructure investment or more, closing gaps and boosting capacity. And, the BRI also aims to improve customs administration. Through such actions the BRI could ultimately boost global trade by 5% according to one estimate3. ” said Lippoldt.

Furthermore, while the CPTPP and the RCEP are making progress, there are also many other FTAs under negotiation in the region. For example, China is negotiating 8 new bilateral accords4. The European Union has three new deals pending with Asian partners and several others under negotiation5.

"FTAs help to increase policy stability, limiting the ability of governments to intervene arbitrarily in trade.” Lippoldt added. Therefore, the increasing trend of countries seeking to negotiate free trade agreements should contribute positively to trade sentiment.


Uncertainty amid trade tensions

Although economic fundamentals point to a positive long-term outlook for trade, the current policy environment is volatile along some key trade corridors. US-China trade relations are tense as the US has moved to impose tariffs and quotas on an increasing range of imports. China has underscored its willingness to pursue dialogue with the US, but it has also signalled its intent to respond proportionately to US actions.


Businesses Pursue Growth Drivers

The first sets of USD34 billion in tariffs implemented by both sides has rattled markets. However, there are bright spots for businesses in the current trade landscape. Promising technology applications are being implemented, such as HSBC’s recent first live pilot trade finance transaction using blockchain, for a shipment of soybeans from Argentina to Malaysia. “This blockchain transaction radically improves the speed and efficiency of trade transactions by removing paper and bringing all participants to a single digital network. The total transaction time was reduced significantly from the typical 5-10 days to within 24 hours. For our clients, this provides a trade finance solution that is simpler, faster, more transparent and even more secure – this is an extremely positive development.” said Ajay Sharma, Regional Head of Global Trade and Receivables Finance, Asia Pacific, HSBC, in his welcome remarks.


Ajay Sharma, Regional Head of Global Trade and Receivables Finance, Asia Pacific, HSBC

Furthermore, businesses are taking proactive measures to manage the effects of the possible implementation of further tariffs, demonstrating the willingness to find solutions. “One of the things you can be doing right now as a company is looking at your supply chains, looking at your import data for potentially tariffed goods and seeking exclusion from tariffs through various mechanisms.” commented Olson.


Positivity despite trade tensions

Despite the trade policy turbulence along certain corridors, there is a cautious optimism elsewhere largely driven by several major factors.

First, new technologies will lead to greater ease of trade and business when implemented. Second, good prospects for future trade are driven by the vast potential in the rising middle class and rapid development of the emerging markets. Finally, cooperation on regional initiatives and a number of Free Trade Agreements will facilitate trade and investment along trade corridors within Asia and between Asian nations and more distant partners.

Together, these factors show that while the trade policy landscape is at risk in some areas, there remains strong underlying potential for continued trade recovery and growth in the period ahead.

1 HSBC (2018), Navigating the changing global trade policy environment: Hong Kong

2 UN, World Bank; HSBC, Consumer in 2050, 15 October 2012. HSBC Global Connections, December 2016, and HSBC Trade Navigator,, March 2018.

3 F. Zhai, Journal of Asian Economics, 2018.

4 MOFCOM, June 2018,

5 WTO; HSBC, TRADE POLICY IN 2018, 10 January 2018, and the EU:

Blockchain: transforming the future of trade finance

Explore the groundbreaking end-to-end trade finance transaction on Corda.

The New Age of Global Trade: Innovation and Opportunities

Technological advances and innovation are now changing the way we do business and the way trade takes place across borders. Both the rapid expansion of e-commerce and the proliferation of trade agreements across the world are giving rise to a new era of growth for global trade.

At HSBC Trade Outlook Forum - The New Age of Global Trade: Innovation and Opportunities – trade and economic experts, alongside industry leaders, discussed the region’s economic and trade outlook for 2018, as well as sharing insights on how Hong Kong businesses can seize the trade opportunities presented by the digital economy through harnessing the great power of e-commerce and innovation.

Trade in the Digital Age: Opportunities and Challenges

The rapid development of e-commerce has led many to contemplate the future of conventional brick-and-mortar businesses in the digital age. Companies need to adjust to the digitally savvy generation and put customer experience at the heart of how they approach their operating and marketing models.

"Trade in the Digital Age: Opportunities and Challenges" was the theme of a customer event organised by HSBC. A number of speakers offered insights into the latest trends shaping the e-commerce industry, as well as advice on how businesses can tap into the full potential of e-commerce.

Trade Perspectives: Global Deals and Technology to Shape the Future

HSBC’s customer engagement event, ‘A New Perspective to Trade’, held in Hong Kong, delved into how China’s Belt and Road Initiative (BRI) and other initiatives can address challenges trading companies face currently. Douglas Lippoldt, Chief Trade Economist at HSBC Global Research, and Ajay Sharma, Regional Head of Global Trade and Receivables Finance Asia-Pacific, highlighted the various catalysts behind the current fragility of global trade, explored the potential impact of a number of new and pending trade agreements, and commented on the rise of digital innovation affecting the trade process.

Trade Perspectives Global Deals and Technology to Shape the Future Speaker 1
Douglas Lippoldt, Chief Trade Economist, HSBC Global Research

Rising tide of global trade

The world economy has been showing signs of improvement with GDP forecast to rise 2.8 per cent in both 2017 and 2018 and trade expected to accelerate by 4.1 per cent and 3.2 per cent in the same period1 .

Against the backdrop of an improved pace of economic growth, Dr Lippoldt commented that, “Global trade is nonetheless currently showing some signs of fragility.” The potential for serious conflicts in various regions of the world likely stems from economic nationalism. Globalisation and the rules-based multilateral trade system, which seemed so universally desirable not so long ago, are increasingly becoming subject to local interpretation.

Dr Lippoldt elaborated that Asia is well positioned to counter these developments and play a leadership role in trade. International commerce at the regional and global levels can be reinforced via pursuit of an ambitious implementation of the BRI, conclusion of new free-trade agreements (FTA) such as the Regional Comprehensive Economic Partnership, and engagement in a positive agenda at the World Trade Organization (WTO).

Disrupted progress to liberalisation

There are a number of factors that could hamper the march of liberalisation and the global trade gains made over the past decade. Mr Sharma acknowledged the work carried out by the WTO to progress the removal of tariffs, but notes that friction is now arising from non-tariff barriers such as regulatory compliance and customs processes.

Protectionism is a mounting trend, a reflection of the state of global politics in 2017, and it is weighing upon global trade. The withdrawal of the US from the Trans-Pacific Partnership (TPP), an agreement drafted over many years of negotiations, is a high-profile demonstration of this.

The OECD’s Global Trade Alert2 estimated that 6,616 new restrictive trade measures have been put in place since 2008. The flip side to this is that trade liberalisation efforts are at risk in some areas. This underscores the importance of steps in Asia to ensure that momentum towards free movement of goods and services is maintained.

China’s involvement offers new possibilities

China continues to maintain its role as a catalyst for trade and is at the centre of many of the major global production chains3 . This is set to increase as Chinese firms move up along the production value chain.

“The Belt and Road Initiative, and other similar initiatives, help in cutting through some of the challenges such as shortfalls in infrastructure development and customs cooperation,” said Dr Lippoldt. “By addressing these issues and reducing friction at the border, BRI could help boost trade by perhaps 5 per cent or more.”

The BRI provides a trade ‘belt’ to link the Eurasian continent through a growing network of railways, highways, pipelines and other infrastructure and trade ‘road’ that links China with South-East Asia and Africa through ports and other maritime linkages. It improves prospects for business by facilitating the flow of trade between the connected countries.

The sheer size and potential of the initiative, which has plenty of political support, should ultimately cause a step change to the way trade flows in the region. The BRI will connect over 60 countries that together account for an aggregate population of 4.4 billion.

“These figures represent 62 per cent of the world's population and 30 per cent of global GDP,” commented Mr Sharma. “It has been rightly referred to as ‘The Project of the Century’ by Chinese President Xi Jingping. And, I think it will change the way trade is conducted in the future globally and the way that we do business … and it will be a huge benefit to us in Asia.”

Douglas Lippoldt, Chief Trade Economist, HSBC Global Research

Ajay Sharma, Regional Head of Global Trade and Receivables Finance Asia-Pacific, HSBC

Support for friction-reducing trade deals

BRI is not the only bright spot. A couple of giant trade agreements could help: the Regional Comprehensive Economic Partnership (RCEP) and a revised TPP now that the US has withdrawn. Also, trade facilitation measures at the border for businesses of all sizes – from multinationals to small-and-medium-sized enterprises (SMEs) – can help drive more inclusive outcomes from trade liberalisation.

“Improved market openness is needed to fully release the benefits that go with trade,” Dr Lippoldt said. “This includes reducing red tape and increasing the ability of SMEs to participate via e-commerce.”

RCEP is a proposed FTA between 16 countries – the 10 members of the Association of Southeast Asian Nations (ASEAN) and Australia, China, India, Japan, New Zealand and South Korea. ASEAN has FTAs with all six of these countries.

The revised TPP4 is another proposed FTA, originally between 12 countries. With the withdrawal of the US in January 2017, the remaining 11 members include Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

China has not been involved with TPP to date. But, TPP is a deeply liberalising trade agreement and China's eventual participation could provide it with improved access to a broad cross-section of markets around the Pacific Basin (and vice versa). China's engagement in TPP may help facilitate the integration of RCEP and TPP in a grand unified FTA of Asia and the Pacific. Academic studies have found that very large welfare gains could emerge from such trade integration (one study found gains of USD1.9 trillion). Either way Dr Lippoldt made the audience certain as to the importance of China’s role in the next steps of global trade.

Technology evolution

While the world watches the developments in FTAs and BRI, technology’s influence on trade cannot be ignored. Mr Sharma highlighted this trend as a major force for making trade easier, and the importance of the support from governments across Asia in rolling out digital platforms.

Digitalisation of trade processes is set to create an ‘Industrial Evolution’5 that will support the expected tripling of global trade by 2050. There are many technical developments that will take place in conjunction with e-commerce, but also there are ways in which it can be used to remove the ‘physical’ friction in trade flows. An example of this is HSBC’s partnership with IBM to use machine-learning to reduce the amount of paper that is used in trade deals and streamline this fundamental process.

All parties in the trade process are working together to find more efficient ways of conducting business, looking for technological solutions to both basic and complex issues. As Mr Sharma noted, “Technology will fundamentally change how we trade in Asia and the world.”

China to lead Asian trade push

Prospects for further market opening in some regions of the world are dimming. Contrary to this, buoyed by underlying GDP strength, Asia has a string of long-term initiatives coming to the fore in terms of regional and multilateral deals and technology trends that will bring positive economic impact and also have the potential to give the region a central global leadership role in trade.


1 HSBC, Global Economics: Getting the balance right, 27 September 2017.

2 Global Trade Alert (as of August 2017); OECD/UNCTAD/WTO (2016), WTO (2017), B20 (2015)

3 HSBC, Asian global value chains, 1 September 2017; UNCTAD

4 The remaining TPP members have recently redubbed the accord as the CPTPP, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

5 HSBC (2015), Trade Winds: shaping the future of international business

Important notes:

  • The Hongkong and Shanghai Banking Corporation Limited (the "Bank") neither endorses nor is responsible for the accuracy or reliability of, and under no circumstances will the Bank be liable for any loss or damage caused by reliance on, any opinion, advice or statement made in this video.
  • The opinions expressed are those of the featured speakers, and except where a speaker is specifically identified as a representative of the Bank, do not represent the Bank's views. The opinions are subject to change without notice and should not be construed as a recommendation of any individual holdings or market sectors.
  • Investment involves risks. Past performance is no guide to future performance. Investors must refer to the offering documents for further details and the risks involved. The information contained within this video is general and should not be construed as personal advice, given it has been prepared without taking account of the objectives, financial situation or needs of any particular investor. Accordingly, investors should, before acting on it, consider the appropriateness of the information, having regard to their objectives, financial situation and needs. If necessary, seek professional investment and tax advice.

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