A look into the magic glass bowl towards 2060

Business and Trade Expectations for China and the Global South Towards 2060

As China continues to solidify its role as a global economic power, its partnerships with the Global South—comprising Africa, Latin America, Southeast Asia, and parts of South Asia—are expected to flourish, shaping the future of global trade, sustainability, and technological innovation. By 2060, this collaboration will have matured into a deeply integrated economic framework.

This extensive analysis covers anticipations on the what, when, where, who, whom, which, whose, why, and how of this partnership, providing detailed expected milestones and expected metrics every five years and a broader outlook on the strategic sectors and expected outcomes.

What: Key Drivers, Sectors, and Trends

• What are the primary drivers?
• Which sectors will grow the most?

When: Key Milestones Every 5 Years

2025: Foundation of Infrastructure and Energy Cooperation

• Belt and Road Initiative Projects: By 2025, 70% of key BRI projects in Africa, Southeast Asia, and Latin America will be completed or nearing completion. Key infrastructure, such as ports, rail networks, and digital fiber optics, will reduce logistics times by 20-30%, enabling more efficient trade between China and the Global South.
• Energy Infrastructure: Early renewable energy projects will add 50 GW of solar and wind power capacity across Africa and Latin America, providing clean energy to 15-20 million homes and reducing dependence on fossil fuels.
• Digital Economy Growth: 500 million people across Africa and Southeast Asia will gain access to 5G and mobile internet, enabling a sharp rise in e-commerce, mobile banking, and fintech adoption.
• Expected Metrics:Trade volume between China and the Global South will reach USD 2 trillion, with substantial growth in infrastructure, digital services, and energy exports.China will invest USD 200 billion in infrastructure and energy projects across the Global South.

2030: Smart Infrastructure and Energy Integration

• Energy Integration: By 2030, China will have helped the Global South integrate 50-60% renewable energy into national grids. Key countries, particularly in East Africa and Latin America, will generate significant solar and wind power, reducing carbon emissions by 40%.
• Green Hydrogen Projects: Large-scale green hydrogen plants in North Africa and Latin America will produce 10-15 million tons of hydrogen annually, establishing these regions as green energy hubs for both domestic consumption and export.
• Smart Cities: 20 cities in Africa, Southeast Asia, and Latin America will have implemented smart city infrastructure, utilizing AI for urban planning, traffic management, and energy consumption, reducing urban carbon emissions by 30%.
• Expected Metrics:Trade volume between China and the Global South will rise to USD 3 trillion, driven by energy exports, technology partnerships, and resource flows.100 million people will gain access to affordable and reliable clean energy across the Global South.

2035: Circular Economy and Renewable Energy Dominance

• Renewable Energy Leadership: By 2035, 100 GW of new renewable energy capacity will have been installed across Africa and Southeast Asia. These regions will begin exporting clean energy to neighboring regions, facilitated by newly built cross-continental power grids.
• Circular Economy Practices: Circular economy principles will be adopted across resource-intensive sectors, reducing waste and enabling 50-60% recycling in mining and manufacturing industries, supported by Chinese investments in eco-industrial zones.
• Digital and Transport Infrastructure: New automated logistics hubs in Southeast Asia and Africa will further reduce trade times by 40-50% compared to 2020 levels, helping integrate the Global South into global supply chains.
• Expected Metrics:USD 4 trillion in trade volume, with the bulk of growth driven by high-tech products, digital services, and clean energy.The adoption of circular economy practices will reduce waste by 30% across the region, saving USD 100 billion annually in resource costs.

2040: Technological Innovation and High-Tech Exports

• AI and Biotech Hubs: China will co-develop 15-20 high-tech innovation hubs across Africa, Latin America, and Southeast Asia, specializing in AI, biotechnology, and nanotechnology. These hubs will generate USD 50 billion annually in high-tech exports and create local employment opportunities in cutting-edge industries.
• Energy Exports: Africa, particularly North and East Africa, will become major exporters of clean energy to Europe and Asia, supplying up to 15% of Europe’s energy needs via cross-continental energy grids.
• Supply Chain Automation: Fully automated logistics and AI-powered trade systems will optimize supply chain efficiency, reducing costs by 60% and further integrating the Global South into China's supply chain networks.
• Expected Metrics:Trade volume will rise to USD 5 trillion, supported by high-tech exports, energy exports, and digital services.The Global South’s exports of clean energy and technology to other regions will reach USD 100 billion annually.

2045: Knowledge Economies and Carbon Neutrality Initiatives

• Knowledge Economy Growth: By 2045, 40-50% of the economies in the Global South will be classified as knowledge-based, with substantial contributions from STEM fields and R&D-intensive industries. China will provide educational support, creating 5 million STEM graduates annually.
• Carbon Neutrality Targets: Many Global South countries will be on track to achieve 50% reductions in carbon emissions by implementing sustainable urban designs, smart infrastructure, and renewable energy solutions. China will help finance these transitions, particularly in heavily urbanized regions.
• Advanced Trade Networks: With fully operational transcontinental trade corridors, trade times between China and Africa, Southeast Asia, and Latin America will improve by 70% compared to 2020, enabling seamless movement of goods, services, and technology.
• Expected Metrics:Trade volume will exceed USD 6 trillion, largely driven by green technology, clean energy, and digital transformation.Knowledge-based industries will account for 25% of the Global South’s GDP.

2050: Global Innovation and Clean Energy Leadership

• Innovation Ecosystems: By 2050, the Global South will host 25-30 world-class innovation hubs, developed in collaboration with China. These hubs will focus on clean technology, biotechnology, and AI-driven healthcare solutions, generating USD 150 billion annually from exports and innovation-led industries.
• Food Security and Precision Agriculture: Precision agriculture, enabled by AI and biotechnology, will boost crop yields by 50% while reducing water consumption by 30%, positioning the Global South as a leading exporter of food to global markets.
• Energy Sovereignty: Renewable energy will account for 80% of domestic power needs across Africa and Latin America. Green hydrogen production will reach 100 million tons annually, enabling the Global South to become a global leader in green energy exports.
• Expected Metrics:Total trade volume will rise to USD 7 trillion, with clean energy, food exports, and high-tech manufacturing driving much of the growth.The Global South will generate 20% of its GDP from clean energy exports and renewable technologies.

2055: Circular Economy Leadership and High-Tech Manufacturing

• Circular Economy Domination: Circular economy practices will dominate manufacturing and resource extraction sectors, with 80% of all waste being recycled. Eco-industrial zones, powered by Chinese technology, will thrive across Africa and Southeast Asia, reducing global CO2 emissions by 20%.
• High-Tech Manufacturing: The Global South will emerge as a major hub for high-tech manufacturing, including electric vehicles (EVs), solar panels, AI systems, and clean technology. These sectors will generate USD 200 billion in annual exports.
• Expected Metrics:Total trade volume will reach USD 8 trillion, with high-tech and green technology products contributing to a significant share of the growth.70% of industrial output in the Global South will come from sustainable and circular economy practices.

2060: Carbon Neutrality and Global Economic Powerhouses

• Carbon-Neutral Economies: By 2060, the Global South, supported by China, will achieve carbon neutrality, with 90% of energy needs met by renewable energy sources. 150 million tons of green hydrogen will be produced annually, establishing the region as the world’s leading clean energy exporter.
• Global Innovation Leadership: The Global South, through continuous collaboration with China, will emerge as a global leader in clean technologies, AI, biotech, and digital economies, contributing 40-50% of global innovation in these sectors.
• Trade Dominance: By 2060, trade between China and the Global South will surpass USD 10 trillion, positioning the regions as pivotal players in global commerce, innovation, and sustainable development.
• Expected Metrics:USD 10 trillion in annual trade volume, driven by high-tech, renewable energy, and sustainable products.80-90% of energy consumed in the Global South will be derived from renewable sources.

Where: Regions of Focus

• Africa: Africa will become a central partner in China’s strategy, with significant investments in infrastructure, renewable energy, and smart cities. Key countries like Kenya, Ethiopia, South Africa, and Nigeria will play pivotal roles in energy and trade.
• Latin America: Latin America’s abundant natural resources, including lithium and agricultural potential, will position countries like Brazil, Chile, and Argentina as key suppliers to China in clean energy and biotechnology.
• Southeast Asia: With its strategic location, Southeast Asia will become a crucial logistics and tech hub, with Indonesia, Vietnam, and Thailand leading the way in smart city development, digital transformation, and advanced manufacturing.

Who: Key Stakeholders

• Chinese Government Agencies: The National Development and Reform Commission (NDRC) and Ministry of Commerce will coordinate China’s investments in infrastructure, energy, and digital development in the Global South.
• State-Owned Enterprises (SOEs): Major Chinese SOEs such as China National Petroleum Corporation, China State Construction Engineering, and Huawei will drive energy, infrastructure, and technology projects.
• Private Sector Leaders: Companies like Alibaba, Tencent, BYD, and JD.com will play key roles in digital transformation, e-commerce, and high-tech manufacturing.

Whom: Beneficiaries and Impacts

• Local Populations: Improved access to clean energy, digital services, education, and healthcare will uplift millions, improving quality of life and reducing poverty levels.
• Businesses in the Global South: Local companies will benefit from technology transfers, new market access, and participation in global supply chains, spurring economic growth and job creation.
• China: China will gain secure access to critical resources, expand its global market presence, and bolster its leadership role in global sustainable development.

Which: Policies and Agreements

• Belt and Road Initiative (BRI): The BRI will continue to be the backbone of China’s economic engagement with the Global South, promoting infrastructure connectivity, trade integration, and green growth.
• Free Trade Agreements (FTAs): A series of bilateral trade agreements between China and Global South nations will foster deeper integration, with a focus on green energy, technology transfer, and digital services.
• Sustainability Frameworks: China and Global South countries will align on climate goals, sustainable trade practices, and green technology standards, ensuring long-term environmental resilience and economic sustainability.

Whose: Ownership and Influence

• Chinese Companies: Chinese firms will maintain significant stakes in large infrastructure and energy projects but will increasingly promote joint ventures and local ownership to ensure equitable and sustainable partnerships.
• Local Governments and Regional Organizations: Global South governments and regional organizations, such as ASEAN and the African Union, will take greater ownership of development projects to ensure alignment with national and regional development strategies.

Why: Motivations and Strategic Importance

• China’s Strategic Motivations: China aims to secure access to critical natural resources, expand its influence in global markets, and lead the transition to a global green economy.
• Global South’s Motivations: Countries in the Global South will benefit from China’s investments in infrastructure, technology, and renewable energy, helping them accelerate economic growth, poverty reduction, and sustainable development.

How: Execution and Collaboration

• Public-Private Partnerships (PPPs): A combination of public-private partnerships, development loans, and bilateral agreements will be used to implement infrastructure, technology, and energy projects across the Global South.
• Technology Transfer and Capacity Building: China will provide technology transfer and skills development programs to local businesses and governments, fostering innovation and enhancing regional capabilities in key sectors.

Conclusion:

By 2060, the partnership between China and the Global South will have transformed both regions into global leaders in sustainable development, clean energy, and technological innovation. The collaboration will be marked by every five-year milestone, driving growth in infrastructure, digital economies, green technologies, and knowledge-based industries. Together, China and the Global South will form a cornerstone of the global economy, leading the world in climate action, inclusive growth, and sustainable innovation, while maintaining a central role in shaping the 21st-century global economic landscape.

Kjeld Friis Munkholm Associate Parter at Vejle - China Business Center

www.munkholmconsulting.com

? 2024 Kjeld Friis Munkholm. All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means without the prior written permission of the author. transmitted in any form or by any means without the prior written permission of the author.