The research notes that the world is undergoing a rapid transformation that is quickly reshaping the global economic landscape. During the last fifty years the emerging economies always relied upon their larger and much richer brethren as the destination for almost all of their exports. But in just the past few years, however, these economies have found a new and rapidly growing group of customers: each other!
The authors claim that the “new geography” of world trade is a further sign of a shift in global power away from the United States and other developed nations. At the same time this brave new world promises to be a positive force for global prosperity during the next decades.
The research finds that in an unprecedented decade in modern world history, the developing countries increased their share of world trade from 6.9 percent in 1999 to 18.2 percent by 2008. This growing share is all the more remarkable considering that trade among the developed countries was growing robustly over the same period.
The authors argue that the potential for further trade integration among the developing countries, particularly the BRIC nations (Brazil, Russia, India and China), is enormous over the next quarter century.
After making some conservative assumptions about each BRIC country’s economic growth potential over the next two decades, the paper estimates that:
- Intra-BRIC trade is projected to grow 12% a year, reaching $1 trillion by 2030.
- At 14% a year, Chinese-Indian bilateral trade is expected to grow the fastest, reaching $450 billion by 2030. This is 50% larger than current US-Chinese bilateral trade.
- The next two largest bilateral trade flows will be China-Brazil and China-Russia, projected to both reach $200 billion by 2030. This is currently equal in size to bilateral trade between the United States and Japan.
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