With its national brand value reaching US$19.5 trillion, China is closing a gap behind leader the United States, according to the latest report by valuation consultancy Brand Finance.

Globally, developing economies on average saw 31.3 times faster nation brand value growth over the past year than developed ones, such as the UK, where Brexit uncertainty is preventing progress.

In particular, China’s nation brand value increased an impressive 40% to US$19.5 trillion in 2019, building on its performance in previous years. Meanwhile, long-standing leader, the United States, recorded brand value growth of just 7% over the past year to US$27.8 trillion.

The difference in value between the two nation brands has dropped from US$12 trillion last year to just over US$8 trillion this year.

The two largest economies in the world have been at loggerheads since July 2018 in a bitter trade war, with tariffs imposed by both sides on billions of dollars’ worth of imports and exports.

Despite this, China’s brand value has defied expectations of a slowdown, benefitting from the success of some of its most dominant brands, including ICBC, Huawei and Alibaba.

The latter two have incorporated strong marketing strategies that mirror their international counterparts and proved themselves as legitimate competitors to Western brands, stated Brand Finance.

The average year-on-year nation brand value growth among developing economies stood at 13.9%, compared to as little as 0.4% for the developed economies included in the annual ranking of the world’s 100 most valuable nation brands.

The classification of developed and developing economies in the Brand Finance study relies on the definitions included in the United Nations’ World Economic Situation and Prospects.

Japan was a notable developed-economy exception with 26% growth to US$4.5 trillion, but even so, it was behind many developing African, Middle Eastern, Asian, and Latin American nation brands.

Consistent with previous years’ trends tracked by Brand Finance, 11 out of the 20 fastest-growing nation brands of 2019 came from Africa and the Middle East, with Ghana (up 67%), Uganda (up 56%), and Egypt (up 50%) in the top five.

Although catching up, at US$37.8 trillion, the combined nation brand value of the 65 developing economies in absolute terms remained far behind that of the 35 developed economies, which stood at US$60.3 trillion.

There were also no new entrants to the top ten club, but India (up 19% to US$2.6 trillion) made the largest jump within the top decile – from 9th to 7th position, after the Indian government’s initiatives to boost the country’s exposure on the world stage, including ‘Make in India’ and the Swachh Bharat mission.

Every country aims to drive some form of competitive advantage for their products through the country’s brand image. Some use tourism advertising, some FDI campaigns, and some global events such as the Olympics.

“But all these drive the ‘inbound’, which in an economic context is equivalent to focusing on imports only,” commented Samir Dixit, managing director of Brand Finance Asia Pacific.

However, exports – the ‘outbound’ – give most countries a better chance to ride out an economic slump. The solution, he suggested, lies in a strong ‘national quality mark’ program, such as the one Vietnam undertook.

Due to the Vietnam Value program, its processed food industry now contributes upwards of US$17 billion of the country’s exports, and the apparel industry over US$22 billion.

Brand Finance measures the strength of nation brands using a five-step method determining a nation’s performance on data points across goods and services, investment, society, proportion of GDP generated from primary, secondary, and tertiary sectors, brand-related revenue streams, and a weighted average cost of capital to account for risk.

Sourced from Brand Finance