How emerging economies will shape the future of trade
China, India, Brazil, and Russia are part of the emerging economies that are beginning to play increasingly important roles in the global trade industry. These countries are driving the demand in key areas such as fossil fuels, textiles, and mobile phones and will likely start to bring even more impact. They are rapidly growing and need imports to sustain their growth. So how exactly are emerging markets shaping the future of trade?
The Role of Emerging Economies
Trade plays a vital role in the development of the global economy. The exchange of goods and services helps countries by catering to local demands and leads to relatively high employment rates. Similarly, the rise of emerging economies has also facilitated global trade, and these countries have now become essential to the worldwide economy. They are growing rapidly, and their energy demands are rising. In fact, countries such as China and India are currently among the largest importers of fossil fuels. As these countries manage to record a sharp rise in their per capita incomes, their vast populations are likely to drive the demand for other products such as cars, smartphones, and personal computers as well.
According to McKinsey, by 2025, emerging markets will likely consume nearly two-thirds of all goods produced around the world. Their impact will only continue to grow and will be responsible for over half of the global consumption by 2030. This is a highly significant figure and indicates that these nations will impact the global flows of services, finance, goods, data, and more in the near future. The global manufacturing industry will depend heavily on these countries to sell their products, with Asia already being seen as a vital market by most of the top brands around the world. The role of this continent, along with several others, is likely to assume even more significance shortly.
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