Shifts in world trade open up business opportunities for Canadian companies

**Trade forecasts to 2030 confirm Canada will achieve its goal of diversifying its export base away from North America
** Emerging markets' demand for high value-added goods will boost Canadian export growth of industrial machinery and transportation equipment

VANCOUVER, March 11, 2013 /CNW/ - The latest HSBC Global Connections Trade Forecast details a shift towards the production of higher value-added goods around the world, presenting opportunities for forward thinking companies looking to expand.

Rapid industrialisation and increasing wages, coupled with maturing consumer demand in many of the countries along the South-South corridor are driving different types of global trade growth. This report highlights how these trends are changing the types of goods imported, manufactured and subsequently exported.

The top three markets for Canadian exports are currently the US, China and the UK. However, the fastest growing corridors of Canada's export growth by 2030 will be Asia and the Middle East, and exports to Vietnam, China and India are expected to increase by 12% annually from 2021 to 2030.

Linda Seymour, Executive Vice President and Head of Commercial Banking, HSBC Bank Canada said: "A highly educated and productive Canadian workforce will continue to underpin growth of capital goods exports from Canada. In fact, outside of natural resources, we expect that as emerging markets mature and grow in size they will demand more value-added goods from Canada, in particular transportation equipment and industrial machinery."

As countries shift towards value-added sectors there are significant opportunities for companies to evolve and grow. The reports for countries such as Vietnam and Bangladesh show a shift from basic commodities trading in sectors such as Cereals or Sugar, to become a refiner or producer of branded goods based on those raw materials. In many of the developed markets there is a shift towards increasingly specialised sectors such as Chemicals and Pharmaceutical products as companies seek opportunities for higher returns.

This shift towards the production of higher value-added goods is particularly evident in Asia, with a clear pattern emerging as Chinese export growth in Information & Communications Technology and Industrial Machinery gathers pace.  This balances a declining rate of growth in sectors such as Textiles, giving rise to opportunities for companies in the smaller, faster growing countries around the region to win contracts to produce these more basic goods.

James Emmett, HSBC's Global Head of Trade and Receivables Finance, said: "Emerging markets are developing at a phenomenal pace and are set to reshape world trade patterns over the next 20 years.  By expanding their operations in to new, higher value sectors, they are driving more developed nations to specialise and diversify to compete. Understanding which sectors are growing in which markets, delivers huge opportunities for businesses as they plan for the future and aim to capitalise on these trends."

Emerging markets add ever increasing value to the supply chain
Countries making the move up the supply chain most notably are Malaysia and Argentina. Malaysia's top exportable goods will shift from lower-value sectors such as Animals and Vegetable Oils to higher-end industrial machinery, which will make the largest contribution to Malaysia's export growth by 2030. Argentina's top export sectors will change from Animal Products to Transport Equipment and Industrial Machinery.

Industrial machinery opportunity
Industrial Machinery, ranging from large power generating machinery to small parts for domestic electrical items, will extend its dominance as the world's top export sector. It will encompass around 25% of goods exported among the top 25 trading nations by 2030, and contribute over a third of the growth in total merchandise exports from 2013 according to the Forecast.

Hubs
Intra-regional trade and reliance on hub cities continues to play a strong role in facilitating global trade flows, as companies look to capitalise on new opportunities while managing their exposure in rapidly developing markets.

Notes to Editors:

1. For a copy of the Global Connections Trade Forecast report and for further information, log onto www.globalconnections.hsbc.com. An info graphic which portrays key findings from the latest trade forecast is also available upon request.
   
   
2. HSBC's Trade forecast encompasses trade data for the 25 countries key to world trade.
   
   
3. About the HSBC Trade Forecast - Modelled by Oxford Economics
   Oxford Economics has tailored a unique service for HSBC which forecasts bilateral trade for total exports/imports of goods, based on HSBC's own analysis and forecasts of the world economy to generate a full bilateral set of trade flows for total imports and exports of goods, and balances between 180 pairs of countries.
   
   Oxford Economics produces a global report for HSBC, plus regional reports and country specific reports on the following 25 countries: Hong Kong, China, Australia, Indonesia, Malaysia, India, Singapore, Vietnam, Bangladesh, Canada, USA, Brazil, Mexico, Argentina, UK, France, Turkey, Germany, Poland, Ireland, UAE, Saudi Arabia, Korea, Japan and Egypt.
   
   Oxford Economics employs a global modelling framework that ensures full consistency between all economies, in part driven by trade linkages. The forecasts take into account factors such as the rate of demand growth in the destination market and the exporter's competitiveness. Exports, imports and trade balances are identified, with both historical estimates and forecasts for the periods 2013-15, 2016-20 and 2021-30.
   
   Oxford Economics - formerly Oxford Economic Forecasting - was founded in 1981 to provide independent forecasting and analysis tailored to the needs of economists and planners in government and business.  It is now one of the world's leading providers of economic analysis, advice and models, with over 500 clients. Oxford Economics commands a high degree of professional and technical expertise, both in its own staff of over 70 professionals based in Oxford, London, Belfast, Paris, the UAE, Singapore, Philadelphia and New York, and through its close links with Oxford University and a range of partner institutions in Europe and the US.
   
   
4. HSBC
   HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 6,600 offices in 81 countries and territories in Europe, the Asia-Pacific region, North and Latin America, and the Middle East and North Africa. HSBC Bank Canada, a subsidiary of HSBC Holdings plc, is the leading international bank in Canada.  With assets of US$2,693 bn at 31 December 2012, the HSBC Group is one of the world's largest banking and financial services organizations.

SOURCE: HSBC Bank Canada

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