New economic models for new realities
Published: 03 July 2010
Given the complex relationships now driving today's global economy, analysts can no longer look to the United States as a predictor of market movements. Emerging markets need to be given a heavier weighting in the global economic equation.
Emerging market giants such as China seem to have the upper hand over the established economic powers. The US and the European Union have been experiencing trade deficits in their bilateral trade with the Asian giant for many years.
Although foreign direct investments are still flowing from developed economies towards emerging markets, there is also an increasing counter-flow taking place. Cash-rich businesses from emerging market economies are becoming familiar investors in established companies in the west. As China, the leading emerging market, generates excess liquidity and savings, the cash-strapped developed world is hoping to receive some of these by way of investments or loans.
These complex, non-linear, and well-distributed trade relationships dilute the effect that economic upheavals in the United States may have on the rest of the world, or what economists are referring to as a 'fundamental decoupling' of these economies.
All these point to the fact that the world economy is no longer US-centric, or primarily determined by events in developed nations.
Emerging markets are showing a strong resistance to the downward pull of floundering western economies. On the other hand, these fast-growing developing markets have shown through these turbulent times that they are capable of boosting themselves up by their own power.
From "Still on Fire?", Global Research
In consideration of these new relationships and consistent with its century-long leadership in emerging markets, HSBC economists are developing new analytical tools and framework that capture these new economic realities, giving clients a better view of emerging opportunities not only in their part of the world, but from a truly global perspective. HSBC's Global Research economists are well-placed to build new, practicable models that better represent the new economic order where emerging markets now play a determining role.
Expert emerging markets advice
As emerging markets continue to evolve, the global investor faces unique risks and opportunities. For this reason, progressive and pioneering investors value the advice of financial experts in these emerging markets who know the local conditions and can guide them through the territory.
Hongkong and Shanghai Banking Corporation Limited, the founding member of the HSBC Group, was established over a century ago to finance the trade between Europe, India and China. As early as 1865, the Bank saw promise in the economies of Asia and invested when many others preferred caution. This experience and expertise in emerging markets has benefited HSBC clients for well over 140 years. The knowledge built on that global experience will help the Bank and its customers benefit from the growth of emerging markets in the 21st century.
Too good to be true
The forecasting community believes that we're 'living in the best of all possible worlds'. But policymakers are wary of the uncertain effects of globalisation. We believe the developed world is vulnerable to the effects of the US slowdown but there is reason to be cautiously optimistic about emerging markets.
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Emerging markets research
Emerging markets research is a key area of focus for Global Research and brings together all aspects of research across Asia, Latin America, Eastern Europe, the Middle East and Africa. Learn more about our emerging markets research.
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