In the last two decades some Asian economies have imposed themselves on the global scenario because of their extremely high economic growth rates.
The role of these countries will be determinant from now to the next years, since tendencies that will radically modify the current global macroeconomic picture are taking place within their borders.
When speaking of emerging Asian countries we mean China, India, Korea, Taiwan, Indonesia, Malaysia, Thailand and the Philippines.
Their growth, in the past and still today, has been driven by foreign demand. Simplifying, we can say that the developed Western countries consume goods produced in Asia.
This development model is doomed to change deeply.
In the emerging Asian countries the growth perspectives of domestic demand appear to be stronger than those of foreign demand. This tendency is supported by numerous factors, both structural and cyclical.
The demographic factor is the main element: Asia is the area where the highest population increase will take place. In the last 15 years population growths have been relevant in India (+265 million people), China (+135 millions), Indonesia (+46 millions) and in the Philippines (+24 millions). The increases have been substantial also in relative terms: the population percentage growth has been above 20 % almost everywhere, with peaks of 41% in Malaysia, of 24% in Indonesia, of 29% in India and of 34% in the Philippines.
The phenomenon is also qualitative: the middle class in Asia is coming into existence and developing. The data of per capita GDP, for example, indicate that in the next ten years in the Asian region the number of people with a per capita GDP above 5 000 USD will rise from the current 470 millions to over 1.2 billions: an increase of about 700 million people, that will belong to the middle class and that, probably, will adopt consumption models closer to those of the Western middle class.
Urbanization represents another structural factor, that historically, has favored a strong increase in consumption. It is estimated that the ratio between urban population and total population will go from 34% in 2000 to 43% in 2015, up to 52% in 2030. In the Western world the number should remain constant at 80%.
Let’s examine now the cyclical factors, that is those linked to the present phase of the economic global cycle, which can strengthen or weaken the transition process under way.