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In Face of Trade Strife, USA and China Lead Ranking of Nation Brands

The value of the United States as a brand increased 23 percent in the past year, to $25.9 trillion, according to the latest Brand Finance Nation Brands report.

The report by the valuation and strategy consultancy calculates the world’s largest nation brands based on a valuation date of July 1 and similar to how large corporations are often rated. It ranks countries based on performance on dozens of data points across three key pillars: goods & services, investment and society.

David Haigh, CEO of Brand Finance, said, “It is more important than ever that governments, trade
bodies and businesses take steps to ensure that their nation brand is strategically well-managed.”

Brand Nation said the U.S. economy has expanded rapidly, with growth expected to continue in the coming months. The U.S. Bureau of Economic Analysis estimated second-quarter gross domestic product (GDP) growth of 4.2% in its most recent report. According to IHS Markit tracking, GDP growth slowed in the third quarter but remained strong at 3.4%. IHS forecasts fourth-quarter year-to-year GDP growth to rise to 3.1%, from 2.5% last year.

Brand Nation noted that consumer sales, which include fashion and apparel, construction orders, car output and growth indicators all have been on the upswing, while falling tax rates have created a more business-friendly environment.

This has led the USA’s Brand Strength Index (BSI) score to improve this year to 85.6 out of 100, from 83.8 in 2017. As a result, the USA brand rating has been upgraded from AAA- to AAA.

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“As Donald Trump approaches the start of his third year at the White House, in the longer run, negative perceptions of his personal brand have turned out to have little impact on the nation brand as a whole,” Haigh said. “Rather, the new free-market policies have resonated with business leaders and the economy is growing, driving an improvement in America’s brand strength and brand value alike.”

Behind the United States, China maintained its place as the second most-valuable nation brand, with its brand value rising 25 percent, to $12.8 trillion, per Brand Finance’s annual report.

Perhaps ironically, given the trade war between the Trump administration and Chinese President Xi Jinping, China’s rise in brand value can be credited to booming cities such as Beijing and Shanghai, as well as the breadth of its economy and global reach.

While China’s brand strength remains relatively low at 73.5, it has grown faster than any other big nation brand, with two points added to its BSI score over the past year.

“The rise of China’s nation brand is down to global leadership, pro-business outlook and a steely determination for the country to create brands rather than just products,” Haigh said. “The current government’s renewed commitment towards free trade, opening up of the Chinese market, and enhancing protection of intellectual property will make for a yet improved business environment in the years to come.”

The fastest-growing brand in the top 50 of the Nation Brands was Germany, which saw its brand value jump 28 percent, to $5.1 trillion. This has solidified the country’s position as Europe’s most valuable nation brand and the world’s third most valuable.

Reinforced by Germany’s status as a leading force in the European Union and its growing economic and political prowess, Germany’s brand value improved to $25 trillion, leading to a lift in brand rating from AAA- to AAA.

Political turmoil led by the Brexit crisis was reflected in the U.K.’s nation brand strength, which fell slightly from last year’s score of 85.3, to 84.8. However, a healthy economy and positive growth forecasts enabled the U.K. to record 20 percent year-over-year growth in the value of its nation brand, to $3.8 trillion, and thus replacing Japan in fourth place. Among the remaining top 10 were France, Canada, Italy, India and South Korea.

Also of note, Turkey’s ongoing economic crisis, including the decline in value of the lira, has seen the country’s brand value decline by roughly 33 percent, to $382 billion. Turbulent political times in the wider region, such as the ongoing crises in Syria and Iraq, also have played a part, according to the report.

Meanwhile, six out of 10 of the fastest-growing nation brands this year were from Africa. The Democratic Republic of the Congo, Egypt, Kenya, Tanzania, Ethiopia and Ghana all saw year-on-year growth between 28 percent and 38 percent. The other fastest-growing nation brands were Cyprus, Slovenia and Estonia.

“Starting from a low economic base and still troubled by political instability, Africa is nonetheless beginning to demonstrate its true potential,” Haigh said. “Following in the footsteps of Asian tigers with remarkable advances in this year’s ranking, African lions are the future of global economic growth.”