A New Blue Ocean of 6.3 Billion People: The Next “China” Is the “Global South”

As the geopolitical pendulum swings violently in 2025, the world is accelerating into a period of unprecedented transformation. The Russia-Ukraine conflict continues, while technological rivalries have expanded from semiconductors to artificial intelligence (AI). The global trade system is being shaken by tariff barriers and supply chain restructuring, and the traditional order of globalization is gradually being rebuilt.

In this clash between old and new orders, a new force cluster representing 70% of the global population and a combined GDP exceeding $23 trillion is emerging. The Global South is reshaping the world economic landscape with irreversible momentum. From the African savannahs to the Southeast Asian archipelagos, from the Latin American rainforests to the Middle Eastern deserts, this vast market of 6.3 billion people is unleashing unprecedented growth momentum.

Driven by multiple factors including demographic dividends, resource endowments, policy openness and globalization, the Global South is rapidly emerging as a new engine for global economic growth and a key growth point for trade. As the largest economy in the Global South, China is transitioning from the world’s factory to the “brain of the South” through its comprehensive industrial system, leading technological innovation and invaluable experience in industrial transformation. This shift is reflected not only in the upgrading of its export structure to Latin America and ASEAN but also in its role as an enabler and leader in shaping a new paradigm for South-South cooperation.

Behind the Transformation of Old and New Orders:

How Is the Global South Reshaping Trade Rules?

The formation of a new order is accompanied by a profound restructuring of the global trade landscape. The traditional globalization paradigm established after World War II—dominated by the United States and jointly advanced by Western developed nations—is giving way to a new balance of power, as a new globalization paradigm emerges. A notable manifestation is the structural shift in the direction of international trade flows.

In global trade, the share of South-South trade continues to rise. Data indicates that the share of global GDP accounted for by emerging economies and developing countries (primarily comprising the Global South) has risen from 21.02% in 2000 to 41.23% in 2024, and is projected to reach 43.71% by 2029. Their economic growth rate continues to significantly outpace that of developed economies.

Specifically in terms of trade, China’s exports to Global South countries and Belt and Road Initiative (BRI) partner nations saw particularly strong growth in 2024. Latin America and ASEAN recorded the largest increases, while Brazil, Vietnam and Indonesia were among the fastest-growing countries. New growth drivers are emerging in export products: In 2024, export growth primarily stemmed from the electromechanical products category, with the fastest-growing segments including ships, semiconductors and automobiles. Developing countries have diversified their trade partnerships through enhanced regional cooperation, thereby reducing reliance on external markets.

Since the trade war began in 2018, China’s trade surplus has increased rather than decreased. In 2024, China’s annual trade surplus reached a record high of $992.16 billion, nearing the trillion-dollar threshold. This figure is 2.7 times larger than the surplus recorded prior to 2018 and far exceeds any level achieved by major exporting nations—including Germany, Japan and the United States—over the past century.

This mukes up part of a polarized landscape in global trade characterized by China’s trillion-dollar surplus and a trillion-dollar US deficit. It also reflects the remarkable resilience and international competitiveness of China’s export products amid the backdrop of the trade war.

The competition between China and the United States in the global technology arena has also intensified. Particularly in the field of AI, where China has now joined the US in the same tier. The development of cutting-edge technologies such as DeepSeek and humanoid robots has positioned China as a key player in global technological innovation.

Meanwhile, China is actively expanding South-South cooperation, which not only enhances the international influence of Chinese enterprises but also brings advanced technology and capital empowerment to local communities. Among these, sports, as one of the most universal humanistic bonds, has become an effective vehicle for fostering mutual understanding and deepening strategic trust through its unique appeal that transcends national borders. China has actively supported the development of sports infrastructure across a number of countries, including assisting Belarus, Mongolia, Comoros, Tonga, Tunisia and Barbados in building and renovating nearly 20 venues for various sports. This has helped build a more multidimensional and sustainable collaborative ecosystem for all parties.

The enormous demographic dividend, economic potential and urgent need for accelerated industrialization and openness in the Global South markets position them as the core force driving future global growth. China’s invaluable experience gained from the first three industrial revolutions over the past two decades, coupled with its unique capability to lead the ongoing Fourth Industrial Revolution, will unlock immense potential to empower the “tomorrow” of Global South markets. The Global South will soon become the next China.

Who is unleashing the next wave of growth dividends?

As a geographical benchmark for dividing nations into North and South, the Brandt Line was originally proposed by the United Nations North-South Commission led by former German Chancellor Willy Brandt.

Following the end of the Cold War, the term Third World gradually lost its political significance. The more neutral concept of the Global South has since been increasingly used to describe emerging markets and developing nations, including those in Africa, Latin America, the Middle East and Southeast Asia. These countries and regions account for 70% of the world’s population and approximately 40% to 50% of global GDP, and are seeing very rapid economic growth.

The rise of the Global South is no accident; it stems from the comprehensive realization of multiple dividends:

1. Policy-driven dividends: Countries are actively implementing open policies and development strategies (such as Saudi Arabia’s Vision 2030) to attract foreign investment and technology;
2. Demographic dividends: A large population base, rapid growth and a youthful demographic structure provide ample labor resources and a vast potential consumer market;
3. Resource endowment dividends: Abundant reserves and supply capabilities of fossil fuels (oil, natural gas, coal) and critical minerals (nickel, lithium, cobalt, rare earth elements, etc.) not only provide a foundation for its own development but also create favorable conditions for international cooperation.
4. Globalization dividends: Deeply engaging in and benefiting from the globalization process, accelerating regional economic integration (e.g., ASEAN’s promotion of the ASEAN Digital Economy Framework Agreement).

On the other hand, the current distribution of global value chains exhibits a clear gradient: the US excels in innovation activities but faces deindustrialization. Europe combines innovation activities, advanced manufacturing and services, but lags in innovation within emerging fields such as the internet and AI. China, leveraging its strengths as both a major manufacturing nation and a major consumer market, has evolved over more than two decades into a comprehensive provider of advanced manufacturing and services, while also emerging as a prominent player in innovative fields such as the internet and AI. Markets in the Global South outside of China exhibit greater complexity, ranging from limited primary products to abundance and varying stages of primary manufacturing. They urgently require accelerated industrialization and greater openness.

This gradient distribution has created a high degree of complementarity between China and countries in the Global South along the industrial chain. Global South nations possess abundant energy resources, critical minerals, primary commodities and manufacturing capabilities, alongside vast consumer market potential. However, they urgently require cost-effective industrialization capabilities and expertise to swiftly embrace the Fourth Industrial Revolution.

China possesses comprehensive industrial manufacturing capabilities that are mid-to-high-end and cost-effective, the capacity to serve a large-scale, multi-tiered consumer market and innovation capabilities in the internet and AI sectors. It requires a vast external demand market to absorb its production capacity, along with sufficient energy and key mineral supplies.

Beyond traditional industrial sectors, South-South investment cooperation is expanding into emerging fields such as the digital economy, green energy and AI.

The Blueprint for the Leap from “World’s Factory” to “Brain of the South”

Within this new landscape, China has gradually emerged as a central hub for trade and investment among countries in the Global South. Over decades of development, China has become the largest trading partner for numerous countries in the Global South: maintaining its position as ASEAN’s top trading partner for 16 consecutive years and Africa’s largest trading partner for 15 consecutive years. It is also the primary trading partner for multiple Latin American nations, including Brazil, Chile, Peru and Uruguay.

In the realm of investment, China’s investments in Global South countries are substantial in scale and extensive in scope. China’s outbound direct investment has consistently ranked third globally since 2012. In 2024, China’s non-financial outbound direct investment reached $143.85 billion, marking a 10.5% year-on-year increase. Through establishing industrial development funds and participating in multilateral development financial institutions, China has provided significant financing support for infrastructure development and industrial transformation in Global South countries.

Moreover, as a major manufacturing hub for the Global South, China’s exports to developing countries in 2023 significantly increased its share of intra-developing country trade. Its share in labor-intensive and low-technology-intensive products remained stable, while its share in medium-technology-intensive products rose notably, and its share in high-technology-intensive products stayed steady.

More importantly, China’s integration into global value chains is shifting from merely receiving international industrial transfers to advancing toward the upstream segments of these chains. In sectors such as AI, China has emerged as the foremost innovator among Global South nations.

From “Going Global Together” to Global Leadership:

Chinese Enterprises’ Global Breakthrough

Collaboration and cooperation among Global South nations is of paramount importance in this new paradigm.

In May 2025, the inaugural ASEAN-China-GCC Summit was held, representing a combined population exceeding 2.1 billion and an economic output nearing $25 trillion (each accounting for approximately one-quarter of the global total). This landmark initiative in regional economic cooperation, emerging against the backdrop of the Global South’s rise, has been hailed as a “tripartite alliance whose collective strength has the potential to reshape the global economic landscape.”

For Chinese enterprises actively engaging in global competition, adopting proven models in collaborative overseas expansion is a key strategy for seizing opportunities. Observing the experience of Japanese enterprises, their “group-based overseas expansion” model—centered around general trading companies to form a community of shared interests characterized by industrial synergy, information sharing and risk pooling—effectively amplifies returns and mitigates risks through resource aggregation effects.

This model is underpinned both by the rigid interlocking interests of conglomerates through circular shareholding structures and by the soft foundation of a harmonious culture characterized by unity, mutual assistance, collaboration and tolerance. Chinese enterprises across the industrial chain, local chambers of commerce and other entities can draw inspiration from this model. With the support of collaborative overseas expansion platforms, they can achieve either horizontal (among enterprises within the same segment) or vertical (across the industrial chain) grouped overseas expansion. This approach effectively mitigates risks, enhances overall competitiveness and enables better positioning within the wave of globalization.

Huawei is a successful model of a global enterprise. Huawei has built its overseas capabilities through a long-term strategic approach, gradually establishing a global network spanning R&D, production and sales. In its early stages, Huawei had already dispatched personnel to Russia, India and Africa, but the results were limited. Subsequently, the company successfully completed its globalization transformation through a series of initiatives, including Integrated Product Development (IPD), Integrated Financial Services (IFS) and an Integrated Supply Chain (ISC). Today, Huawei has become a global leader in the telecommunications industry, and its experience holds significant lessons for Chinese enterprises.

The success of corporate globalization ultimately depends on building systematic global operational capabilities. This requires enterprises to adopt a long-term perspective and undertake a comprehensive process of reengineering and capability building across product development, supply chain management, financial services, customer relationship management and other areas, to cultivate genuine global competitiveness.

Amidst a once-in-a-century transformation, entrepreneurs must embrace cross-disciplinary learning to gain a profound understanding of technological innovation, business models, financial innovation, humanistic values, social innovation and global trends. Only then can they lead their enterprises to better seize opportunities and navigate challenges within the new order.

The Cheung Kong Graduate School of Business will continue to build a global cross-border learning platform, empowering entrepreneurs to seize the historic opportunity that the next China is the Global South, and guiding Chinese entrepreneurs to learn globally and win globally.