emerging markets introduction
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INTRODUCTION
TO EMERGING
MARKETS
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Agenda
BRIC
BRIC Growth since 2001
Brazil
India
China
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Certainly, Mexico, the four BRIC countries and
Korea should not be really thought of as emerging
markets in the class ical sense, as we regard
these countries as a critical part of the modern
globalised economy
BRIC
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Brazil 369%
Russia 630%
India 499%
China 201%using the A-share market
BRIC Growth Since 2001
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Worlds fifth largest country
President Dilma Rousseff
Lagging behind growth estimations
Brazil
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In order for Brazil to raise its growth rates and
converge towards its peers in the BRICs, [it] will
have to focus on f iscal po l icy, trade po l icy,
educat ion and modernizing ins t i tu t ions .
Growth
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1. Improve savings and investments2. Lower trade barriers
3. Improve quality of education
4. Introduce structural reforms
Brazils Underperformance
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2. Lower trade barriers
Brazils trade share = 25% of GDP
Russians trade share: 41% of GDPChinas trade share: almost two-thirds of GDP
Importance of Trade
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Worlds second largest population
President Pratibha Devisingh Patil
India
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6 Major Factors1.Lowering trade barriers
2.Rise of financial sector
3.Rise of IT sector4.Golden Quadrilateral Highway
5.Urbanization
6.Land factor
Change in India
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4. Golden Quadrilateral
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3,625 milesFour/Six lanes
Connects four largest cities:
Delhi (N), Kolkata (E),Chennai (S), Mumbai (W)
Almost completed
4. Golden Quadrilateral
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10 of 30 fastest growing cities worldwide
Urbanization in India
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Segments in India
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Segments in India
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Consumption in India
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Share-of-Wallet
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Income Pyramid
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Consumption Categories
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Attract, educate new consumers.Retain brand loyalty with rising tastes.
Offer high-value at accessible (low)
price.
New Challenges
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Worlds largest population over 1.3billion
Governed by CPC (Communist
Party)
China
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China
s unrivalled economic growth over the past
quarter-century has surpassed all records and
created a new standard in the history of economic
development.
Annual real GDP growth rate
Average of 9.6% from 1978 to 2004Reference point: Brazils unattained forecast was 5.0%
Chinas Growth
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Will China grow old before getting rich?
Chinas Aging
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Chinas Aging
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1978
Chinas One-Child Policy
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Economy should continue to grow.Renewed opportunities for Chinas
neighbors.
Aging benefits specific factors(Insurance, pharmaceuticals,
biotech).
Implications
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Forecast
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Some Numbers
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1. Beijing2. Shanghai
3. Tianjin
4. Shenzhen5. Wuhan
6. Chongqing
7. Chengdu
8. Guangzhou
6 New Megacities
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Migration
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Growth based on industrial development andexports; unsteady, unstable, unsustainable
Increasing private consumption will not onlyboost GDP, but insulate itself from volatility
imported from overseas
Boosting Private Consumption
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% of GDP accounted for by private
consumption
United States: 71%
Japan: 55%
South Korea: 48%
China: 36%
Boosting Private Consumption
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Threemajor strategies
1.Expanding availability of products
2.Improving quality of products3.Increasing availability of consumer credit
Boosting Private Consumption
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Threeminor strategies
1. Improved social safety-netwould boost health-care and retirement spending
2. Structural reformswould increase household income
3. Shift towards serviceswould boost employment, economic growth, consumption
Boosting Private Consumption
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By 2015, China will hold the worlds fourth-largest
concentration of wealthy people.
-Estimated by McKinsey Quarterly
In 2007, there were 421,100 Chinese students
(15% worldwide) enrolled in higher educational
institutions in overseas countries.
- UNESCO Global Education Digest 2009
China
BRIC
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Brazil
Russia
India
China
BRIC
S
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Summary
BRIC
BRIC Growth since 2001
Brazil
India
China
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Recommended Reading
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