The old and the new TRIAD - BRIC´s
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Transcript of The old and the new TRIAD - BRIC´s
The old and the newTRIAD
• Students:• Mehdi Laouiti• Thang Vu• Thiago Resende
Agenda
IntroductionAims and objectivesThe classic TriadThe classic Triad under threatBRICSThe new TriadWhy the new Triad Conclusion
Introduction World trade is dominated by a relatively small
number of nations. Governments of these nations take a lead in international organizations and their companies are responsible for a large number of international trade and investment.
Most commonly, countries are ranked according to their national income or their share of world trade. Another indicator might be the level of foreign direct investment (FDI) undertaken by their home based MNEs.
Currently, a glance at international trade reveals that some of the Asian countries, such as China , Korea and India are emerging as powerful economies and have almost taken a place from two of the world economic leaders and the triad nations; japan and Europe.
While some of the Triad nations are showing a downfall, America sustains its leadership in world economy. China can be considered as the new emerging leader and a nation who might leave America behind in coming years.
Aims and Objectives To indicate significance of the worlds
major trading nations; Discuss the role played by USA, Japan
and Europe in the world economy; Identify newly emerging economic
nations; Identify the key determinants of the
success of the emerging nations; Consider advantages and disadvantages
of doing business in US, Japan, Europe, India and China;
Determine the reasons why some nations are showing downfall.
II World War - Europe divided by 2US – Marshal Plan to restore UE and
stop URSSCold War and US supporting Japan After Cold War 3 nations emergedUS and Japan – Technology innovationEurope – Trades and high demandGlobalisation
The Classic Triad
USA GDP ¼ of world´s economy 1st Military power Multinationals exploring 3rd world countries
The Classic Triad
Japan Technology innovation - robotic Importing raw material and exporting electronics Developing new processess to optimize production
Europe Trades and commercial alliances High demand for products (densely populated area) Top countries pulling the economy
10 largest economies graphic (GDP 2011)
28%
14%
11%7%
5%
5%
5%
4%
3%
3%
16% United States
China
Japan
Germany
France
Brazil
United Kingdom
Italy
Russia
India
Others
World´s GDP 2011: US$ 69,990,000 millions (source: The World Factbook)
World´s total trade in 2011
• World ´s total trade in 2011: US$ 27,567 billions.• Source: CIA World Factbook (US Central Intelligence
Agency)
16%
14%
13%
10%6%
41%
European Union (EU27) United States China Germany JapanOthers
The Classic Triad Is Surviving Survives but within a broader picture of NAFTA, EU and
Asia (ASEAN).
There are pockets of data that support a new Triad but that we await confirmation within the bigger picture and public domain ( published books by experts) that a new structure is emerging/has emerged.
Traditional Triadic model perhaps needs changing to NAFTA, EU and even BRIC (Brazil, Russia, India, China), but really all is speculation from isolated pockets of data looking at different indicators of economic activity.
There is still value in the classic Triad currency. We have changed to metric, but the old units survive and are used, pounds weight, gallons, inches etc. so why not continue with the classic Triad measure.
BRICS
BRICS, originally "BRIC" before the inclusion of South Africa in 2010,
is the title of an association of emerging national economies:
Brazil , Russia, India, China and South Africa.
With the possible exception of Russia, the BRICS members are all developing or newly industrialised countries, but they are distinguished by their large, fast-growing economies and significant influence on regional and global affairs.
As of 2013, the five BRICS countries represent almost 3 billion people, with a combined nominal GDP of US$14.9 trillion, and an estimated US$ 4 trillion in combined foreign reserves. Presently, India holds the chair of the BRICS group
The name BRIC was proposed by Jim O´Neill, British economist which works for Goldman Sachs.
Painting BRIC by numbers
Categories Brasil Rússia Índia China
Area 5º 1º 7º 3º / 4º
Population 5º 9º 2º 1º
GDP (nominal) 6º 9º 10º 2º
GDP (PPP) 8º 6º 4º 2º
Exports 21º 11º 20º 1º
Imports 20º 17º 11º 2º
Trade balance 187º 4º 182º 1ºConsumption of electricity 6º 4º 5º 1º
Automobile per capita 65° 51° 114° 72°
Economic liberty 81° 122° 121° 111°
Oil production 9° 1° 23° 5ºHuman Development Index 84º 66º 134º 101º
GDP prediction for 2050 (billions US$)
Source: Goldman Sachs study of BRIC and N11 nations, 2007.
Position in 2050 Country 2050 2040 2030 2020 2015
1 China 70.710 45.022 25.610 12.630 8.133
2 USA 38.514 29.823 22.817 17.978 16.194
3 India 37.668 16.510 6.683 2.848 1.900
4 Brazil 11.366 6.631 3.720 2.194 1.720
5 Mexico 9.340 5.471 3.068 1.742 1.327
6 Russia 8.580 6.320 4.265 2.554 1.900
7 Indonesia 7.010 3.286 1.479 752 562
8 Japan 6.677 6.042 5.814 5.224 4.861
9 Iran 5.945 3.085 1.673 994 716
10 United Kingdom 5.133 4.344 3.595 3.101 2.835
GDP prediction for 2050 (billions US$)
Source: Goldman Sachs study of BRIC and N11 nations, 2007.
Group
Countries 2050 2040 2030 2020 2015 2010
BRIC 128.324 74.483 40.278 20.226 13.653 8.640
G7 66.039 53.617 43.745 36.781 33.414 30.437
India: a wise elephant
India: a wise elephant
China: Unleashing the Caged tiger
BRIC and International politics
America is now driving the globalization of India and China.
The “ New TRIAD “ has already formed within US, China and India, creating large sources, and growing markets for foods, services and capital.
The new triad has become a growth engine for the global economy, all three economies are growing in terms of GDP and productivity.
India and China are both critical to America’s continued economic success.
The New Triad
Trade between triad All countries in the triad are net
suppliers to the US consumers. China has the largest trade surplus
($110 Bn). China and India provides low-cost
production and delivery centres
Trade Potential China and India together provide
huge workforces in services and manufacturing sectors
China and India represent cheap sources of labor and large consumer market
Direct Investment Potential FDI represents the expansion of
American enterprises to foreign countries in productions and investments
US being an insider, is increasingly critical in markets like India and China
Portfolio Investment Potential Both 3 countries have Significant
ammount of Portfolio Investment These create a positive global
dynamic for America
The New Triad
Why The New Triad?
Of the world’s top ten economies, India, China and US:
Constitute 70% of the total population (approx.)Share of the top three economies is 3/4th of the
world’s GDP (approx.)Present largest markets in the worldWill be largest resource consumersWill raise issues on environment and
sustainabilityAre going to shape the future geo-political
landscape
Conclusion
Forecast from Goldman Sachs says that India and China will dominate the economy in 2050, forming the new TRIAD.
The old TRIAD still remain for few years; The demand of US, EU and Japan will remain
level; The BRICS and new TRIAD will take over from
2020; Until 2050 the BRICS GDP will be twice big as
G7.
To finalize…
Thank you!