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McKinsey: China is becoming one of the most globally connected economies in the world

By Hu Yuanyuan (chinadaily.com.cn) Updated: 2014-05-14 20:20

China ranks No 25 out of 131 countries in a new Global Connectedness Index a report from the McKinsey Global Institute (MGI) showed on Wednesday.

China is very strong in flows of goods and finance, but is much lower in flows of people and data and communications, according to MGI's analysis.

The country has become a world leader in flows of goods and finance, where it is ranked 5th and 6th most connected in the world respectively.

This is much higher than any other emerging economy, and even higher than most mature economies. According to the report, this reflects China's role in global manufacturing supply chains and its large inflows of FDI and outflows of central bank reserves.

"By further increasing its connectedness in services, data, and people, China has the potential to capture the full benefits of globalization and accelerate the transition of its economy to one that is driven more by innovation and consumption," said Chen Yougang, McKinsey partner and head of MGI China.

China's total goods, services, and financial flows total $5.1 trillion—20 percent of all global flows and nearly twice China's share of global GDP, the report showed.

An ever-growing proportion of economic activity takes place across borders. Cross-border flows of goods, services, and finance totaled $26 trillion in 2012 or 36 percent of global GDP, more than 50 percent larger relative to the size of the world economy than 20 years ago.

Today, these flows contribute between 15 percent and 25 percent of global GDP growth or about $250 billion to $450 billion a year, and could triple in the next decade, according to the report.

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