Blog: Why we should rethink the "emerging market" tag
Dean Best | 2 November 2007
The world’s emerging markets have been a topic of conversation high on the agenda in the office this week.
It was interesting then to read two articles in The Business magazine, which I picked up at Glasgow airport and read on the plane on the way home from a conference this week.
The first highlighted the fact that a Chinese company, PetroChina, has just become the world’s second-largest company, with a market capitalisation of US$434bn, compared to the US’s General Electric which is valued at $420bn.
The article went on paint a picture of a global economy in great flux. “It is perhaps the most dramatic overhaul of corporate and economic clout witnessed for a generation or more…Whichever way you slice the numbers, the change is striking. Of the top five companies in the world, three are now Chinese…Of the top 10, five are Russian or Chinese.”
The conclusion is that we are seeing a decisive shift in power and The Business argues that it may soon be necessary to drop the “emerging” tag from these markets.
The conclusions I drew from that article ran into the second piece rather well. All the talk at various events I have been at recently concerning emerging markets has centred on the potential for Western companies to take advantage of growth in these economies.
However, they have failed to look at the consequences of the emergence of companies based out of these BRIC markets with serious financial clout and international aspirations.
The acquisition of US meat processor Swift by Brazil-based meat giant JBS this year could be the beginning of a shift in power.
The second article in this week’s The Business highlighted a speech by Hu Jintao, the Communist Party Secretary, which said China “must accelerate the growth of Chinese multinational corporations and Chinese brand names in the world market".
Such rhetoric would have been unheard of only a few years ago, but it demonstrates China’s aspirations to be an economic power of global scale but also one with an international reach.
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