China, the world's second-largest economy, is challenging the throne held by the United States for the “most valuable nation brand”, with its value increasing 44 per cent year-on-year to US$10.2 trillion this year, according to a new report.
The US maintained its top position, with its brand value at $21.1tn; however, it only saw a 2 per cent year-on-year growth from last year putting its dominance at risk, according to a report by London-based consultancy Brand Finance.
Perceptions of Donald Trump’s presidency aren’t exactly helping Brand America with its world image waning. “Sabre-rattling in the Middle East and Asia, closing borders to migrants and refugees and breaching global commitments in relation to climate change, have all seriously undermined the US’ global leadership. Recovering that influence in the future may be close to impossible,” Brand Finance said.
This has given impetus to China.
The Asian country’s brand value grew 20 times faster than that of the US.
The consultancy evaluated 100 countries to determine the basic value of a country's economy as a whole. Brand Finance said that China is the fastest-growing nation brand this year with a change of over $3.1tn year-on-year, or equal to the entire value of the UK.
The growth is marked by President Xi Jinping's move to transform the Asian nation from just being a place for manufactruing companies to a country that has its own "world-renowned brands". Chinese companies now make up 50 of the Global 500 most valuable companies, up from eight in 2008.
China’s growth strategy, known as the Belt and Road initiative, will also ensure an uptick in the Middle East, said Andrew Campbell, managing director of Brand Finance Middle East. “The region provides a steady flow of commodities to satisfy China’s demand for natural resources and maintaining a good relationship with the Middle East is high on the agenda of the ‘Belt and Road’ plan,” he said. “The region stands to gain from the mutually beneficial relationship with China as the initiative unfolds.”
Meanwhile in the Middle East, the UAE was the “absolute champion” when it came to brand value growth increasing 24 per cent to $594 billion, Mr Campbell said. “The UAE is the world’s third most powerful nation brand, with a Brand Strength Index score of 88.8, coming behind only Singapore and Switzerland,” he said.
The UAE's decreased reliance on oil and higher emphasis on economic diversification helped improve its stance on societal related indicators from the judicial system efficiency to the reliability of police services and ethical behavior of companies.
Mr Campbell said: “Growth is likely to come from countries that successfully manage to transform their economies and decrease their dependence on oil. Improving social welfare would be another key point to future brand value growth.”