Sheth

Chindia Rising: How China and India Will Impact Globally DR. JAGDISH N. SHETH Founder, ICA Institute Charles H. Kellstadt Professor of Marketing Emory University [email_address]

The Fundamental Shift From the 20 th to the 21 st Century
While the 20 th Century was driven by governments of advanced nations, the 21 st Century will be driven by markets of emerging nations.
Emerging Nations Markets 21 st Century Economics Advanced Nations Governments 20 th Century Economics

Forces Driving the Shift AGING OF AFFLUENT NATIONS FORCES DRIVING THE SHIFT EQUAL ACCESS TO WORLD RESOURCES COLLAPSE OF COMMUNISM ECONOMIC PRAGMATISM

Economic Growth Engines for the World EUROPEAN CENTURY AMERICAN CENTURY ASIAN CENTURY 1800s 1900s 21st CENTURY

New Measures of World Economies
The new measure is Purchasing Power Parity (PPP).
U.S. $ 14 trillion
China $ 13 trillion
India $ 5.2 trillion
Japan $ 4.5 trillion
Germany $ 2.8 trillion
U.K. $ 2.4 trillion
France $ 2.1 trillion
Russia $ 2.1 trillion
Brazil $ 2.1 trillion
Italy $ 1.9 trillion
2008 Source: International Monetary Fund (IMF)

New Measures of World Economies (cont.)
China is the second largest economy based on PPP index and just surpassed Germany in GDP. It will be the largest single economy by the year 2020.
India is the third largest PPP economy, and it is likely to surpass Germany and Japan in GDP by 2020.

The Old Triad Power
75% of world trade was concentrated among the triad power nations.
70% of world GDP was concentrated among the triad power nations.
The triad power desperately needs economic growth to sustain employment and political stability.
As of 1987 CANADA UNITED STATES JAPAN EUROPEAN UNION

The New Triad Power CHINA INDIA UNITED STATES Impact on Resources, Markets and Politics - CHINDIA +

Impact on Global Resources Emergence of strange bedfellows Resource driven global expansion Resource driven global mergers Rise of scarcity driven profits Shortage driven breakthrough Innovations 1 2 3 4 5 6 Raising resource life expectancy

Impact of Global Resources
Resource driven global expansion - IBM in India - China in Africa - India in CALA
Resource driven global mergers - Energy - Steel, copper, aluminum - Agriculture, land - Talent
Emergence of strange bedfellows - China’s influence in Africa - India and Iran - Russia flexing muscles

Impact of Global Resources
Rise of scarcity driven profits - Commodities - Scientific pool - Industrial minerals
Shortage driven innovation - Alternate energy - Cloning of living organisms - Manufactured materials
Raising resource life expectancy - Green movement - Public private partnerships - Mandatory regulations

Impact on Global Markets Emergence of largest consumer markets Affordability becomes focus of innovation Rise of Chindia’s global enterprises Fusion of cultures Rising tide lifts all boats R&D shifts to Chindia 1 2 3 4 5 6

Impact on Global Markets
Emergence of largest consumer markets - Cell phone - Steel - Education
Rise of Chindia’s global enterprises - Mittal Steel - Haier - China Mobil
R&D shifts to Chindia - China surpasses Japan in R&D - India’s next BPO will be global R&D - Asia centric R&D

Impact on Global Markets
Affordability: New focus of innovation - Bottom of the Pyramid (BoP) market - Healthcare - Education
Fusion of cultures - Arts & entertainment - Food, shelter and clothing - Spiritual values
Rising tide will lift all boats - The American Model - Growth markets for Western enterprises - Chindia’s investment in advanced countries - Trade & investment in other emerging economies

Impact on Global Politics G-8 will grow to G-10 Rise of multilateral politics Economics as driver of politics Chindia leadership in world bodies Emergence of new global currency 1 2 3 4 5 6 Redefining capitalism & democracy

Impact of Global Politics
Economics as driver of global politics - Resource driven politics (Bolivia, Venezuela, Central Asia) - Market driven politics (Chindia, Russia, Brazil) - Global trade and investment hubs (Dubai, Shanghai, Singapore)
G-8 will grow to G-10 - China and India as equal partners - Emergence of Russia-China-India Coalition
Rise of multilateral politics - Emergence of trilateral politics (Europe, US, APEC) - APEC becomes geopolitical bloc

Impact of Global Politics
Chindia leadership in world bodies - UN agencies (WHO, ILO, ITU, UNIDO) - World agencies (IFM, WorldBank) - Environmental & global security agencies
Emergence of new global currency - New Asian currency (ACU?) - Future of dollar economy - Trilateral currency wars
Redefining capitalism and democracy - Compassionate capitalism - Disciplined democracy - Worldwide rise of spiritualism

Conclusion
While the 20 th Century was driven by governments of advanced nations, the 21 st Century will be driven by markets of emerging nations.
Aging of affluent nations, economic pragmatism, collapse of communism, and equal access to world resources, are responsible for this megashift.

Conclusion
This will lead to the rise of China and India as the next super economic powers in the first half of this Century.
Rise of Chindia (China and India) will have worldwide impact on global resources, global markets and global politics.

Conclusion
Demand for world resources will create strange bedfellows among nations, as well as resource driven global expansion of all enterprises.
Global megamergers of resources industries will result in greater profitability in upstream commodity industries.
Major technology breakthrough will come from resource conservation and resource scarcity.

Conclusion
Emergence of Chindia’s consumer driven economy and rise of Chindia’s global enterprises will have positive impact on world economy.
Key driver of innovation will be affordability and accessibility of products, technologies and services.
There will be a new global currency anchored to Asian economy.

Conclusion
China and India will emerge as world leaders in politics. They will be integrated into world political, social and economic forums and institutions.
Rise of Chindia will redefine capitalism and democracy.

Sheth

by South Asian Studies Association on Nov 12, 2008

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