Saturday, January 15, 2011

Big Emerging Markets and Opportunities

Big emerging markets are normally considered to be the BRIC nations and sometimes BRICK standing for Brazil, Russia, India, China and South Korea. They represent the nations of the world with large populations, some of which are transitioning from closed economies to open market economies. As they emerge it is hoped that they will embrace economic reforms, transparency and efficiency in their capital markets. This draws foreign investment and that increases the speed of advancement which hopefully leads to significant growth in GDP and more major economic reforms. According to the United States department of Commerce website: ( Exhibit 6 Exports, Imports and Trade Balance by country and area, Not Seasonally adjusted 2009- this is the rank order of the United State’s first 17 trading partners:

1. China

2. Canada

3. Mexico

4. Japan

5. Germany

6. United Kingdom

7. South Korea

8. France

9. Taiwan

10. Ireland

11. Venezuella

12. Italy

13. Malaysia

14. Saudi Arabia

15. India

16. Brazil

17. Thailand

Of these nations some adjustments are necessary to determine the 3 biggest emerging nations. China is an obvious choice with the world’s largest population. It recently replaced Canada as the number one trading partner of the USA. Its GDP is $7.926 trillion, the world second largest but it rates 100th in per capita GDP at $5,970 which when normalized is $3,259. In addition there are still major problems in doing business with China. Its form of government and its monetary strategy are two examples. According to the World Bank however, China’s reforms and growth have lifted “several hundred million” people from absolute poverty since the late 1970s. This accounts for 70% of the world wide poverty reduction in the last 20 years- quite an accomplishment. Another promising statistic is that women and girls are 99% literate. This is a statistic that is unique among developing nations.

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