– VITA newsletter, March 2008
Power of Emerging Markets
In the mid-90’s America was the dominant power of the world economy in terms of consumer spending. At the present time, emerging economies are reversing this trend and claiming leadership of world consumers by increasing spending by 65 percent.
Both Chicago-based economist Mr. Hale in his Wall Street Journal article, and author Mr. Mahbubani in his book entitled “The New Asian Hemisphere” stated the following statistics that would be helpful for international trade professionals:
- In 2007, the developing countries of Brazil, Turkey, Poland, South Korea, China, Indonesia, Vietnam and India produced over 52% of global growth, compared to 37% during the late 1990’s.
- The developing countries percentage of total world output has risen to 29% this year from 18% in 2005.
- America’s share of global imports fell to 14% last year from over 20% in 2000. The import share of the developing countries grew to 40.6% last year from 33% in 2000.
- By the year 2030, 361 million Chinese – more than the entire current population of the U.S.– may meet the World Bank’s classification for middle class. This includes the people who “buy cars, engage in international tourism, demand world-class products, and require international standards for higher education.”
- Singapore, Taiwan, Hong Kong and South Korea (Asian Tigers) along with China and India have been going through the modernization process and are attempting to establish a modern capitalist economy.
All the facts mentioned above confirm our belief that there is no room for protectionism in a world of global free trade. The capital and jobs that leave the U.S. can contribute to stronger economies in the rest of the world and create markets for small and medium sized American companies in which they can sell their products and services.
Ayse Oge, President of Ultimate Trade, International Trade Consulting, Speaking and Training
She can be reached at 818-708-9571 e-mail: email@example.com