The second decade of the 21st century was marked by a high growth for the Indian economy. India’s real GDP growth was at its peak in March, 2010, when it reached 13.3%. The nominal GDP growth at that point was over 16.1%. The bad news was that in September 2019, this number was at 6.3%, its lowest in the decade. This decrease could be attributed to the sliding share of the industrial output. What is strange here is that this is only typical for post-industrial economies while India is yet to be fully industrialized. However, the Indian government has already set the ball rolling by announcing one of the largest and ambitious infrastructure projects earlier this year. It is also undertaking many projects planned earlier and reviving a few stalled ones. If the planning is successful, India may renew its ascendance.
Trading and Cooperation Development
The graph shows that export within Asia is much larger than with the other global regions and despite political tensions, the level of economic interconnectivity remains very high. The strengthening of the trade and investment links on the continent is improving the region’s resilience to uncertainties in the global trade environment. Asia’s fast recovery rate is helping it to maintain strong growth momentum amidst the ongoing crisis and its continued integration and cooperation will underpin regional industrial and financial strength
The first chart in this section shows cross-border Merger & Acquisition activity, which is a tactic used to rapidly expand to new markets on a global scale. During 2018, the United States was the leading acquiring country for cross-border M&A activity with over 4717 deals, accounting for almost 50 percent of the total cross-border deals made during 2018. The United Kingdom (UK) and France were the next largest acquiring nations with 775 and 448 deals respectively.
By definition, Foreign Direct Investment includes "mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations, and intra company loans. So, therefore, M&A activity is a detailed part of FDI, including only special types of contracts, when the whole FDI includes more aspects.
The graph that follows demonstrates the Foreign Direct Investment (FDI) outflows which are the investments made by a firms or individuals in one country into business interests located in another country. The chart demonstrates that the first two places belong to Asian countries: Japan and China.
FDI can help stimulate economic growth, both for the recipient country and for the country making the investment. For example, a developing country might benefit from incoming FDI as a way of financing the construction of new infrastructure or solving the employment issues. On the other hand, multinational companies can benefit from FDI as a way to expand their footprint into international markets.
The following pages of the chapter study the growing amounts of billionaires in Asia and the power of passports of Asian countries giving wealthy Asians competitive advantages in mobility.
GDP per capita growth
Asia was the continent that recovered the fastest since the global financial crisis from 2007-2008. The average growth rate of the Asian economies exceeded 6% in 2010 (which was more than double that of their Western counterparts).
According to the data for 2019, Oriental countries are still leading the world in terms of economic development with a growth rate of more than 3%. Although, it seems that Eastern ascendence has slowed down for the moment, it is only because of the maturing of the Chinese economy while the other big players like India and Indonesia are still catching up and will surely raise that number.
GDP per capita
Even though Asia lags behind the West in terms of GDP per capita, its huge growth rate is about to change that. There are comparatively fewer countries in Asia compared to the West that could be considered developed (according to the United Nations) and those are the four Asian Tigers plus the industrial giant of Japan.
The gap between the richest and poorest countries in Asia is staggering. The continent holds the state with one of the highest GDPs per capita in the world - Qatar and also one of the world’s poorest and most closed societies - North Korea.
That shows that Asia is the land of extremes, but unlike Africa it possesses many of the most technologically progressive countries like South Korea, Japan and Taiwan. More so, the dazzling growth of the Chinese economy is set to transform global politics in the 21st century.
Economic Power Distribution
The Nominal Gross Domestic Product (GDP) sector composition shows some very important points regarding the structure of the local economy.
In developed countries, the services are the biggest part of the GDP due to the high industry automatization rates. The opposite is true for the developing world where, due to the lack of economic industrialization, agriculture takes the first place.
According to data from the United Nations Statistics Division, the People’s Republic of China accounted for 28% of global manufacturing output in 2018. That gives the country more than 10% advantage ahead of the US, which used to own the world’s largest manufacturing sector until in 2010, China took over the leading position. As the Chinese economy continues to industrialize, the percentage of people working in the sector will surely go down, something typical for post-industrial societies.