Which nations have benefited most from globalization?
Chinese President Xi Jinping’s strong advocacy for globalization in Davos has received widespread praise, but it is hardly surprising when you consider that China has been the main beneficiary.
Figure 1 shows that China’s share of world gross domestic product (GDP), measured in purchasing power parities, rose from 4.1% in 1990 to a staggering 17.86% in 2016, and China’s rise to become the workshop of the world.
India has also benefited greatly from this. Its share of global GDP rose from 3.6% in 1990 to an estimated 7.3% in 2016. It’s not in China’s league, but it has done pretty well even with the opening up of its economy.
While many argue that increased cross-border trade and investment benefits all countries, there are still some nations that have outperformed others. As in China and India, this is reflected in their increased share of global GDP.
On the other hand, it also means that the share of some countries in world GDP has decreased.
Figure 2 shows that the share of the large industrialized countries of the G7 group – Canada, France, Germany, Italy, Japan, Great Britain and the USA – rose from more than half of world GDP in 1990 to 30.9% in 2016 The share of the 28 countries of the European Union was reduced from 27.6% to 16.8%. One could argue that this is very welcome as it has helped raise the standard of living in much poorer countries.
But have all emerging markets benefited? Not really.
Figure 3 shows that the proportion of “emerging and developing countries”, which include the heavyweights China and India as well as the Southeast Asian tiger states, has increased from 12.5% to 31.8%.
But the improvement in sub-Saharan Africa’s share of GDP between 1990 and 2016 was tiny – from 2.8% to 3%. The increase in the share of the “Middle East, North Africa, Afghanistan and Pakistan” region was also marginal. The share of Latin America and the Caribbean fell from 10% to 7.9%. The share of the countries of the Commonwealth of Independent States of the former Soviet Union shrank, as did the share of “emerging and developing countries”.
It is known that emerging economies make up a much larger portion of the world economy today than they did in 1990. Taken together, they now make up 58% of the world economy, compared to 36% in 1990. But what is sometimes not realized is that other than the Asian Developing countries have not increased their share of global GDP significantly, while many of them have seen their share decrease. In relative terms, Asia, and China in particular, have benefited most from globalization. No wonder Xi is fighting to keep it that way.
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