China remains strong driver of trade and air cargo
China remains a powerful driver of global trade and airfreight, despite growing Southeast Asia production and supply chains that have sustained strong air cargo demand out of the region.
Speaking to Air Cargo News, professor Steven Altman, director of the DHL Initiative on Globalization at New York University's Stern School of Business, said that China's trade growth has in fact defied forecasts.
"The strength of China's trade growth, exports growth last year, and exports and imports this year, was also one of the surprises that we've seen recently," he said.
"Because given the trade policy environment and the geopolitics, the forecasts were calling for a substantial slowdown in China's trade growth, and that has not happened," added Altman, who leads the research initiative behind both the DHL Globalization Tracker and the DHL Trade Atlas.
"If we look at 2025, China's trade volume grew about twice as fast as what was predicted at the beginning of the year. China's trade forecast has also been upgraded for 2026 to call for actually faster growth in 2026 than 2025."
He noted that China's imports had become stronger and exports had diversified, supporting airfreight trade flows in and out of the country.
"For a while it was just driven by exports, and China's imports were quite weak. But recently, we've also seen stronger growth in China's imports," Altman explained.
The export mix has shifted towards electric and hybrid vehicles, technology-oriented products, intermediate goods and capital goods.
He stressed there has been a "transformation in terms of China's role as an exporter".
The country has "become particularly important exporter in automotive industry with the strength of electric vehicles as well as hybrid vehicles coming out of China, much more technology-oriented products, as well as this shift toward more intermediate goods exports coming out of China and capital goods," he elaborated.
"So China keeps having more and more sophisticated mix of exports, and as they've lost competitiveness in some of the industries, they've rewarded and made up for it in new industries where China has become very strong."
Southeast Asia keeps growing
At the same time as China's trade is evolving, Southeast Asia has turned into a trade powerhouse, partly fuelled by China Plus One diversification.
Growing economies in Southeast Asia have been fuelling a steady increase in production and supply chains in the region over the last decade, although the US-China trade war and tariffs have accelerated these supply chain changes.
Alongside this, last year saw airlines move capacity from China to Southeast Asia and also away from the transpacific trade lane to Asia-Europe, although the transpacific trade lane has since regained strength.
Speaking about Southeast Asia's growth trajectory, Altman said: "If I think about what's likely to happen over 10 years, I think Southeast Asia is really one of the most powerful hotspots in terms of global trade growth."
He said this is likely to be reflected in the next edition of the DHL Trade Atlas, which looks at the speed and the scale of trade growth and is due to be released in March 2027.
Analysis in the most recent edition of the Trade Atlas showed multiple countries in the region that were performing well based on these factors.
Vietnam and Indonesia "were particularly strong", while recently Malaysia and Thailand have also had strong growth, commented Altman.
Southeast Asia has several advantages to support its trade growth, he said. One is macroeconomic growth, while another is its geography - it is at the centre of global trade growth, close to South Asia and India, where trade is also growing.
He added: "Countries so far in Southeast Asia have been able to play this connector role in the current period of geopolitical tensions, and that has been a strong, powerful driver for their trade growth."
On the subject of production shifting from China to Southeast Asia, Altman further commented that because manufacturing in the latter is not as sophisticated, there are more trade opportunities.
"Let's say a firm relocates production from China to Vietnam or Indonesia, Thailand, or Malaysia. This will tend to result in more trade because those Southeast Asian countries do not have the same domestic supplier base that China has, so you're going to need to bring in more inputs to produce in those economies, which are smaller and not quite as sophisticated in terms of manufacturing as China is.
"So often, a relocation from China to Southeast Asian countries results in more trade because of that supply chain effect, and also it brings foreign direct investment as well. So it ultimately results in more rather than less international activity."
