Hong Kong Ranks No.1 in Depth of Connectedness, No. 12 Overall in Global Connectedness Report

Second DHL Global Connectedness Index reveals globalization remains lower than pre-crisis peak, challenges total globalization myth and calls for greater connectedness to address economic stagnation

HONG KONG, Dec. 11, 2012 /PRNewswire/ -- The second DHL Global Connectedness Index( http://www.dhl.com/gci ) (GCI) has revealed that Hong Kong's economy tops the charts worldwide in terms of the depth (Note 1) of its connectedness, but ranks only 78th in breadth (Note 2). Overall, the combined scores place Hong Kong 12th globally in global connectedness and 2nd within East Asia & Pacific. The top three markets in the East Asia & Pacific ranking are, in descending order, Singapore, Hong Kong and South Korea.

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Hong Kong continues to perform well in the trade pillar, reflecting its role as an export gateway for mainland China -- note the greater breadth of Hong Kong's merchandise exports than its merchandise imports. In 2011, Hong Kong exported goods worth 187% of its GDP and exported services worth 50% of its GDP. 69% of Hong Kong's merchandise exports went to destinations within East Asia & Pacific, even though East Asia & Pacific makes up only 25% of the world economy.

Hong Kong also has exceptionally high depth scores on the capital and information pillars, and it ranks first in the world on international internet bandwidth per internet user. In 2011, 138% of Gross Fixed Capital Formation in Hong Kong was accounted for by inward Foreign Direct Investment (FDI), and 43% of Hong Kong's inward FDI stocks came from within East Asia & Pacific.

In terms of population, the intra-regional theme continues, with 90% of people born in Hong Kong still residing here, and among the 10% who have migrated, 12% remain in East Asia & Pacific. Most (87%) international tourists and 96% of international students come from within East Asia & Pacific.

As a region, East Asia & Pacific is ranked second in terms of depth of global connectedness -- a measurement of four components (trade, capital, people and information flows) -- and ranked third overall after leaders Europe and North America. The region topped the trade flow pillar. Nevertheless, the Index revealed that the world is less globally connected than it was in 2007. Improvements could be a way out of the economic doldrums for many economies.

Jerry Hsu, CEO, Asia Pacific, DHL Express, said: "The DHL Global Connectedness Index rightly debunks the damaging myth of total globalization. The Index reveals a world operating in a range of 10-20% globalization with 50-60% of international flows happening intra-regionally. This means there's still huge potential for greater connectivity between countries especially since levels remain lower than before the financial crisis. The potential gains could reach trillions of dollars and during this period of slower growth, greater international connectedness should be embraced as a vital engine for economic recovery and prosperity."

Kelvin Leung, CEO, Asia Pacific, DHL Global Forwarding, said: "The major economies within Asia Pacific are comparatively well connected, and the region tops the global trade flow pillar. This is despite trade between high-income countries having stagnated. To maintain any positive momentum, however, governments must resist protectionist measures that hinder cross-border interactions and any effort or initiative to ease trade flows must be supported."

Paul Graham, CEO, Asia Pacific, DHL Supply Chain, said: "The migration of production and consumption to emerging markets has specific implications for the three industries highlighted in the report -- pharmaceuticals, passenger cars and mobile phones. The 2012 Index concludes that the world's shifting economic center of gravity is reshaping industry connectedness and offers valuable lessons on how companies can adapt their strategies to benefit from the changing geography of production and consumption."

The report, a detailed analysis of 140 countries and the flows that connect them, draws on over one million data points from 2005 to 2011 creating a comprehensive analysis of the state of globalization today.

The GCI was commissioned by DHL and conducted by world-renowned global business strategist and economist, Pankaj Ghemawat, Professor of Global Strategy at the IESE Business School, Barcelona. It documents how global connectedness grew robustly from the report's baseline year of 2005 to 2007, and then dropped sharply at the onset of the financial crisis.

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Note to editors:

The DHL Global Connectedness Index 2012 as well as supplemental background information can be downloaded at www.dhl.com/gci.

Frank Appel and Pankaj Ghemawat will also illustrate why global connectedness matters at Deutsche Post DHL's blog www.delivering-tomorrow.com. For the latest news and happenings about DHL in Asia Pacific, visit http://press.ap.dhl.com.

Notes:

1. Depth refers to how much of a given activity is international (rather than domestic)

2. Breadth complements depth by looking at how broadly the international component of a given type of activity is distributed across countries

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