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Chindia Rising

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  1. 1. 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]
  2. 2. The Fundamental Shift From the 20 th to the 21 st Century <ul><li>While the 20 th Century was driven by governments of advanced nations, the 21 st Century will be driven by markets of emerging nations. </li></ul>Emerging Nations Markets 21 st Century Economics Advanced Nations Governments 20 th Century Economics
  4. 4. Economic Growth Engines for the World EUROPEAN CENTURY AMERICAN CENTURY ASIAN CENTURY 1800s 1900s 21st CENTURY
  5. 5. New Measures of World Economies <ul><li>The new measure is Purchasing Power Parity (PPP). </li></ul><ul><li>U.S. $ 14 trillion </li></ul><ul><li>China $ 13 trillion </li></ul><ul><li>India $ 5.2 trillion </li></ul><ul><li>Japan $ 4.5 trillion </li></ul><ul><li>Germany $ 2.8 trillion </li></ul><ul><li>U.K. $ 2.4 trillion </li></ul><ul><li>France $ 2.1 trillion </li></ul><ul><li>Russia $ 2.1 trillion </li></ul><ul><li>Brazil $ 2.1 trillion </li></ul><ul><li>Italy $ 1.9 trillion </li></ul>2008 Source: International Monetary Fund (IMF)
  6. 6. New Measures of World Economies (cont.) <ul><li>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. </li></ul><ul><li>India is the third largest PPP economy, and it is likely to surpass Germany and Japan in GDP by 2020. </li></ul>
  7. 7. The Old Triad Power <ul><li>75% of world trade was concentrated among the triad power nations. </li></ul><ul><li>70% of world GDP was concentrated among the triad power nations. </li></ul><ul><li>The triad power desperately needs economic growth to sustain employment and political stability. </li></ul>As of 1987 CANADA UNITED STATES JAPAN EUROPEAN UNION
  8. 8. The New Triad Power CHINA INDIA UNITED STATES Impact on Resources, Markets and Politics - CHINDIA +
  9. 9. 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
  10. 10. Impact of Global Resources <ul><li>Resource driven global expansion - IBM in India - China in Africa - India in CALA </li></ul><ul><li>Resource driven global mergers - Energy - Steel, copper, aluminum - Agriculture, land - Talent </li></ul><ul><li>Emergence of strange bedfellows - China’s influence in Africa - India and Iran - Russia flexing muscles </li></ul>
  11. 11. Impact of Global Resources <ul><li>Rise of scarcity driven profits - Commodities - Scientific pool - Industrial minerals </li></ul><ul><li>Shortage driven innovation - Alternate energy - Cloning of living organisms - Manufactured materials </li></ul><ul><li>Raising resource life expectancy - Green movement - Public private partnerships - Mandatory regulations </li></ul>
  12. 12. 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
  13. 13. Impact on Global Markets <ul><li>Emergence of largest consumer markets - Cell phone - Steel - Education </li></ul><ul><li>Rise of Chindia’s global enterprises - Mittal Steel - Haier - China Mobil </li></ul><ul><li>R&D shifts to Chindia - China surpasses Japan in R&D - India’s next BPO will be global R&D - Asia centric R&D </li></ul>
  14. 14. Impact on Global Markets <ul><li>Affordability: New focus of innovation - Bottom of the Pyramid (BoP) market - Healthcare - Education </li></ul><ul><li>Fusion of cultures - Arts & entertainment - Food, shelter and clothing - Spiritual values </li></ul><ul><li>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 </li></ul>
  15. 15. 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
  16. 16. Impact of Global Politics <ul><li>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) </li></ul><ul><li>G-8 will grow to G-10 - China and India as equal partners - Emergence of Russia-China-India Coalition </li></ul><ul><li>Rise of multilateral politics - Emergence of trilateral politics (Europe, US, APEC) - APEC becomes geopolitical bloc </li></ul>
  17. 17. Impact of Global Politics <ul><li>Chindia leadership in world bodies - UN agencies (WHO, ILO, ITU, UNIDO) - World agencies (IFM, WorldBank) - Environmental & global security agencies </li></ul><ul><li>Emergence of new global currency - New Asian currency (ACU?) - Future of dollar economy - Trilateral currency wars </li></ul><ul><li>Redefining capitalism and democracy - Compassionate capitalism - Disciplined democracy - Worldwide rise of spiritualism </li></ul>
  18. 18. Conclusion <ul><li>While the 20 th Century was driven by governments of advanced nations, the 21 st Century will be driven by markets of emerging nations. </li></ul><ul><li>Aging of affluent nations, economic pragmatism, collapse of communism, and equal access to world resources, are responsible for this megashift. </li></ul>
  19. 19. Conclusion <ul><li>This will lead to the rise of China and India as the next super economic powers in the first half of this Century. </li></ul><ul><li>Rise of Chindia (China and India) will have worldwide impact on global resources, global markets and global politics. </li></ul>
  20. 20. Conclusion <ul><li>Demand for world resources will create strange bedfellows among nations, as well as resource driven global expansion of all enterprises. </li></ul><ul><li>Global megamergers of resources industries will result in greater profitability in upstream commodity industries. </li></ul><ul><li>Major technology breakthrough will come from resource conservation and resource scarcity. </li></ul>
  21. 21. Conclusion <ul><li>Emergence of Chindia’s consumer driven economy and rise of Chindia’s global enterprises will have positive impact on world economy. </li></ul><ul><li>Key driver of innovation will be affordability and accessibility of products, technologies and services. </li></ul><ul><li>There will be a new global currency anchored to Asian economy. </li></ul>
  22. 22. Conclusion <ul><li>China and India will emerge as world leaders in politics. They will be integrated into world political, social and economic forums and institutions. </li></ul><ul><li>Rise of Chindia will redefine capitalism and democracy. </li></ul>