The Centrality Tracker balances depth with breadth. It includes enough detail to reflect the type and strength of interdependence over time, so that the Tracker can assess to what extent and why changes in economic growth and policy at the hubs will impact elsewhere. It uses bilateral data, comparable across the US, EU and China. The client specifically asked us not to limit the number of countries for the sake of adding extra variables, so we set the inclusion threshold for a variable at around 150 countries, with a good global spread.
The tool now includes more than 50 variables, covering commodities, trade, finance and development. It draws data from many sources. For the EU we have formed an EU aggregate of data from 27 countries, excluding intra-EU flows.
To help with interpretation the tool identifies clusters, or personality types, of countries with similar traits: for example, ‘EU investors’ (comprising the UK, Switzerland, South Africa, Norway, Iceland and the Bahamas) carry out significant M&A investment and some greenfield investment in the EU, but do not receive much in return. Eleven distinct clusters emerged for China, ten for the US and ten for the EU.
Each connection is benchmarked by how sensitive it is to changes in GDP at the hubs, producing a broad spectrum by individual country and by cluster. For China, we also modelled sensitivity to changes in its growth strategy, based on a purpose-made indicator known as the China Growth Strategy (CGS).
Thanks to its intuitive dashboard, with data visualisations and filters, the Centrality Tracker can swiftly answer such questions as:
- “How sensitive is Africa to changes in China’s economic growth rate and why?”
- “Is Latin America more closely aligned to the US, EU or China, and what has changed?”