Global Flows (HL IB Geography)

Materials, Goods & Services

• Places are interconnected by a range of flows; some are beneficial, some are exploitative and some are illegal

• Many stakeholders are involved and their power varies from place to place

Growth of world trade

• Since 1995, world trade volume and value have expanded on average by 4% and 6%, respectively

• The COVID-19 pandemic affected global trade, which shrank by 8.9% and had a serious effect on shipping costs, which has continued to increase by 350% since May 2020

• In 2022, the global trade of goods exported throughout the world was valued at US$24.9 trillion and had risen to pre-pandemic levels in 2019

• According to the World Trade Organisation, merchandise trade volume grew by 1.7% in 2023 and is expected to reach 3.2% in 2024

• North America, Europe and Asia continue to account for the bulk of trade

• However, trade (imports and exports) in goods increased more strongly in developing countries than developed countries, increasing by 31% between 2019 and 2022, with exports up by 41% over that period

Services

• The services share of world trade has grown from 9% in 1970 to over 20% today

• Services could account for up to one-third of world trade by 2040—a 50% increase in just twenty years

• Developed economies shift from goods to services, with services exports comprising 28% of total exports as of 2016

• Developing economies are increasing their participation in global services trade, with their services exports growing from 14% to 17% of total exports from 2005 to 2016

• China, India, Hong Kong, and South Korea continued to be the market leaders in commercial services

  • China has a strong manufacturing base, large domestic market, and significant investment in technology and infrastructure

  • India has a large English-speaking population, expertise in IT and software services and competitive labour costs

  • Hong Kong is a strategic location for trade. It has robust financial and legal systems and is a gateway to mainland China's market

  • South Korea has an advanced technology sector, highly educated workforce and government support for innovation and R&D

• Digital services emerged as an important source of growth, accounting for 54% of global services exports in 2022 and 12% of total global trade in goods and services

  • Developed economies export $2.996 trillion and developing economies $946 billion in such services, for a growth rate of 12.6% in 2022

• Within developing countries, travel and tourism account for the majority of commercial services

Merchandise trade

• Exports of goods and services from least-developed countries (LDCs) increased by 31% between 2019 and 2022

• China was the top exporter of merchandise trade in 2022, accounting for 13% of the world’s total (worth $4,000 billion)

  • 2nd was the United States at $3,500 billion

  • 3rd was Germany with $2,500 billion

• Total world merchandise exports were valued at $24.9 trillion in 2022

• Trade in goods and services totalled $31.0 trillion in 2022