A new constellation of growth has emerged, riding on the dynamics created by China, India and Brazil. Even in the current slower growth context, countries as diverse as Indonesia, South Africa, Singapore, Vietnam, Colombia, Chile, Mexico, Peru, the GCC countries – just to mention a few – are latching on to that dynamics with an increasing intensity in investment, financial, and trade interaction.
This new constellation of growth first initiated by China’s – and then India’s – growing need for raw materials, energy and commodities, is fast expanding into a variety of sectors. Deals among the countries comprising this new constellation of growth have soared from only 2% of the global volume of mergers and acquisitions in 2000 to about 15% now. Between 15 and 20% of China’s Sovereign Fund is, for instance, now invested in emerging market countries. China is now Brazil’s Number One trade partner. Trade between China and Africa is at US$ 165 billion and rising, while India-Africa trade is at US$ 31 billion and expanding fast. Trade between the GCC countries and emerging market economies now represents 45% of overall GCC trade.
Whether it is the scale of existing and potential demand, the demographic dividend enjoyed by most of the countries of this new constellation of growth, or the rapid absorption and leveraging of technologies, a number of forces are making this new group of countries an increasingly potent factor in the global economic and business landscape that no corporate strategy can ignore.
MNCs from emerging market countries are driving the fast expansion of this new constellation of growth, reshaping the global competition landscape. The rise of diversified global conglomerates from emerging market countries is in fact one of the major game- changers on the global business scene.