The foundations for cooperation across countries and regions of the Global South are expanding. According to the United Nations Conference on Trade and Development, South-South merchandise exports rose from approximately $500 billion in 1995 to $6.8 trillion in 2025. More than half of developing countries' exports now go to other developing economies.
At the same time, countries still differ significantly in their development conditions, industrial structures and ability to withstand external shocks. The key question is how to strengthen the development resilience of the Global South, or, how to translate its potential for cooperation into the capacity to drive shared development. The answers lie in the following areas.
Respond to external shocks
In the face of unilateralism and protectionism, the Global South should strengthen coordination and firmly uphold the multilateral trading system with the World Trade Organization at its core. We should safeguard basic principles such as most-favored-nation treatment and ensure that reforms respond more fully to the concerns of developing members. For small and medium-sized economies, predictable and nondiscriminatory rules are essential for businesses to gain fair access to international markets.
Cooperation must respond to the practical needs of businesses. In my view, we can give priority to facilitating customs clearance, improving logistics connectivity and sharing market information. These efforts can help businesses find more trading partners and diversify their sources of supply. For essential products such as food and energy — which affect people's livelihoods — we should strengthen policy communication and reduce the impact of sudden policy changes on partner countries.
A UN survey covering 174 economies in 2025 found that the global implementation rate for paperless trade measures was 72 percent, while the rate for cross-border paperless trade measures was 49 percent. When a trading partner accepts an electronic certificate of origin, a small or medium-sized business may save an administrative step and several days of waiting. Such practical improvements can gradually reduce the costs of doing business and boost overall trade.
The Global South can begin with pilot projects at ports of entry and in sectors where conditions are suitable, expand their coverage as experience is gained and use technical assistance to help partners with more limited capacity participate.
South-South cooperation should remain open and inclusive, with South-South and North-South cooperation reinforcing one another. By working with more partners and keeping trading channels open, countries can strengthen their ability to respond to external uncertainties and bring greater stability to the world economy.
Improve industrial capabilities
Shifts in industrial and supply chains have created opportunities for some countries in the Global South to attract investment and develop manufacturing. Once projects are in place, the sustainability of cooperation depends in part on how they generate local employment, develop skills and support local businesses.
Openness to trade and investment and the development of local industries need to be supported by complementary policies. When attracting investment, countries can also improve power supplies and logistics, provide vocational training, and help local small and medium-sized enterprises meet quality and delivery standards. Local businesses can then gradually enter supply chains and share in the opportunities created by investment cooperation.
The China-Egypt TEDA Suez Economic and Trade Cooperation Zone offers a practical example. By end-2025, the zone had attracted nearly 200 enterprises and more than $3.8 billion in actual investment, directly creating around 10,000 local jobs. High-voltage electrical equipment is manufactured locally in the zone, and products such as glass fiber are sold in international markets. The zone demonstrates how industrial cooperation can create a positive link between cross-border investment and stronger local manufacturing capabilities.
Every country has a legitimate interest in developing its own industries. Industrial policy should reflect national conditions, respect multilateral rules, and emphasize transparency and effective implementation. Industries at an early stage of development can receive appropriate support within the limits allowed by established rules. Such support should be accompanied by mechanisms for evaluation and adjustment, with more resources directed toward infrastructure, technological research and development, and workers' skills.
Cooperation projects should also fully respect host countries' development plans and take into account environmental protection, workers' interests and the interests of local communities. Cooperation has a sound foundation when businesses are willing to invest for the long term and local communities receive tangible benefits.
Furthermore, equipment needs people to maintain it once it is in use, and production lines need people to manage them once they are built. Universities, vocational colleges and businesses can jointly develop training programs so that industrial cooperation and talent development advance together. Ultimately, industrial development should strengthen local capabilities.
Enhance financial cooperation
Financial market volatility affects trade and investment through exchange rates, interest rates and capital flows. In strengthening financial cooperation, the Global South should focus on real trade and project needs and improve arrangements for settlement, financing and risk management.
For trade settlement, countries can steadily expand the use of local currencies in line with market demand and businesses' voluntary participation, while improving direct currency conversion, clearing and supporting financing services. In 2025, the central banks of Indonesia, Malaysia and Thailand harmonized and broadened the operational rules of the Local Currency Transaction Framework, providing a more coordinated framework for cross-border trade and investment. This experience merits study in light of each country's circumstances.
Local currency settlement can reduce some of the costs of converting through an intermediate currency. Better matching the currencies in which businesses receive income and make payments can also help them manage exchange rate risks. Exchange rates between currencies still fluctuate, and the actual benefits depend on market liquidity, financing costs and the availability of hedging tools. We should therefore give businesses greater convenience and choice, backed by appropriate financial services.
For long-term investment, multilateral development institutions such as the Shanghai-based New Development Bank can help expand local currency financing and co-financing. In 2023, the NDB issued its first bonds in South Africa, totaling 1.5 billion rand ($90.25 million). It announced that the proceeds would be used for infrastructure and sustainable development projects in South Africa. This offers a practical way to raise funds in local capital markets and support local development.
For projects that earn most of their revenue in local currency, appropriate use of local currency financing can reduce the risks arising from a mismatch between the currencies of revenue and debt service. Project cash flows, debt servicing capacity, and construction and operating conditions must also be assessed, with loan maturities set accordingly. Sound projects are the basis for lasting financial cooperation.
Countries can also strengthen communication among central banks and regulatory authorities and improve currency swap, liquidity support and risk information-sharing arrangements suited to their circumstances. Regional cooperation should complement the global financial safety net, helping businesses that are operating normally continue their trade and investment activities during periods of market volatility.
By making trade flows smoother, ensuring that industrial cooperation strengthens local capabilities and aligning financing more closely with the needs of the real economy, we can gradually improve our collective ability to respond to external shocks. We can also contribute to a fairer, more open and inclusive international economic order.
The writer is a professor of the University of International Business and Economics.
The views do not necessarily reflect those of China Daily.
