The old and the newTRIAD

• Students:• Mehdi Laouiti• Thang Vu• Thiago Resende

Agenda

IntroductionAims and objectivesThe classic TriadThe classic Triad under threatBRICSThe new TriadWhy the new Triad Conclusion

Introduction World trade is dominated by a relatively small

number of nations. Governments of these nations take a lead in international organizations and their companies are responsible for a large number of international trade and investment.

Most commonly, countries are ranked according to their national income or their share of world trade. Another indicator might be the level of foreign direct investment (FDI) undertaken by their home based MNEs.

Currently, a glance at international trade reveals that some of the Asian countries, such as China , Korea and India are emerging as powerful economies and have almost taken a place from two of the world economic leaders and the triad nations; japan and Europe.

While some of the Triad nations are showing a downfall, America sustains its leadership in world economy. China can be considered as the new emerging leader and a nation who might leave America behind in coming years.

Aims and Objectives To indicate significance of the worlds

major trading nations; Discuss the role played by USA, Japan

and Europe in the world economy; Identify newly emerging economic

nations; Identify the key determinants of the

success of the emerging nations; Consider advantages and disadvantages

of doing business in US, Japan, Europe, India and China;

Determine the reasons why some nations are showing downfall.

II World War - Europe divided by 2US – Marshal Plan to restore UE and

stop URSSCold War and US supporting Japan After Cold War 3 nations emergedUS and Japan – Technology innovationEurope – Trades and high demandGlobalisation

The Classic Triad

USA GDP ¼ of world´s economy 1st Military power Multinationals exploring 3rd world countries

The Classic Triad

Japan Technology innovation - robotic Importing raw material and exporting electronics Developing new processess to optimize production

Europe Trades and commercial alliances High demand for products (densely populated area) Top countries pulling the economy

10 largest economies graphic (GDP 2011)

28%

14%

11%7%

5%

5%

5%

4%

3%

3%

16% United States

 China

 Japan

 Germany

 France

 Brazil

 United Kingdom

 Italy

 Russia

 India

Others

World´s GDP 2011: US$ 69,990,000 millions (source: The World Factbook)

World´s total trade in 2011

• World ´s total trade in 2011: US$ 27,567 billions.• Source: CIA World Factbook (US Central Intelligence

Agency)

16%

14%

13%

10%6%

41%

European Union (EU27) United States China Germany JapanOthers

The Classic Triad Is Surviving Survives but within a broader picture of NAFTA, EU and

Asia (ASEAN).

There are pockets of data that support a new Triad but that we await confirmation within the bigger picture and public domain ( published books by experts) that a new structure is emerging/has emerged.

Traditional Triadic model perhaps needs changing to NAFTA, EU and even BRIC (Brazil, Russia, India, China), but really all is speculation from isolated pockets of data looking at different indicators of economic activity.

There is still value in the classic Triad currency. We have changed to metric, but the old units survive and are used, pounds weight, gallons, inches etc. so why not continue with the classic Triad measure.

BRICS

BRICS, originally "BRIC" before the inclusion of South Africa in 2010,

is the title of an association of emerging national economies: 

Brazil , Russia, India, China and South Africa.

With the possible exception of Russia, the BRICS members are all developing or newly industrialised countries, but they are distinguished by their large, fast-growing economies and significant influence on regional and global affairs.

As of 2013, the five BRICS countries represent almost 3 billion people, with a combined nominal GDP of US$14.9 trillion, and an estimated US$ 4 trillion in combined foreign reserves. Presently, India holds the chair of the BRICS group

The name BRIC was proposed by Jim O´Neill, British economist which works for Goldman Sachs.

Painting BRIC by numbers

Categories  Brasil  Rússia  Índia  China

Area 5º 1º 7º 3º / 4º

Population 5º 9º 2º 1º

GDP (nominal) 6º 9º 10º 2º

GDP (PPP) 8º 6º 4º 2º

Exports 21º 11º 20º 1º

Imports 20º 17º 11º 2º

Trade balance 187º 4º 182º 1ºConsumption of electricity 6º 4º 5º 1º

Automobile per capita 65° 51° 114° 72°

Economic liberty 81° 122° 121° 111°

Oil production 9° 1° 23° 5ºHuman Development Index 84º 66º 134º 101º

GDP prediction for 2050 (billions US$)

Source: Goldman Sachs study of BRIC and N11 nations, 2007.

Position in 2050 Country 2050 2040 2030 2020 2015

1  China 70.710 45.022 25.610 12.630 8.133

2 USA 38.514 29.823 22.817 17.978 16.194

3  India 37.668 16.510 6.683 2.848 1.900

4  Brazil 11.366 6.631 3.720 2.194 1.720

5  Mexico 9.340 5.471 3.068 1.742 1.327

6  Russia 8.580 6.320 4.265 2.554 1.900

7  Indonesia 7.010 3.286 1.479 752 562

8  Japan 6.677 6.042 5.814 5.224 4.861

9  Iran 5.945 3.085 1.673 994 716

10  United Kingdom 5.133 4.344 3.595 3.101 2.835

GDP prediction for 2050 (billions US$)

Source: Goldman Sachs study of BRIC and N11 nations, 2007.

Group

Countries 2050 2040 2030 2020 2015 2010

BRIC     128.324 74.483 40.278 20.226 13.653 8.640

G7        66.039 53.617 43.745 36.781 33.414 30.437

India: a wise elephant

India: a wise elephant

China: Unleashing the Caged tiger

BRIC and International politics

America is now driving the globalization of India and China.

The “ New TRIAD “ has already formed within US, China and India, creating large sources, and growing markets for foods, services and capital.

The new triad has become a growth engine for the global economy, all three economies are growing in terms of GDP and productivity.

India and China are both critical to America’s continued economic success.

The New Triad

Trade between triad All countries in the triad are net

suppliers to the US consumers. China has the largest trade surplus

($110 Bn). China and India provides low-cost

production and delivery centres

Trade Potential China and India together provide

huge workforces in services and manufacturing sectors

China and India represent cheap sources of labor and large consumer market

Direct Investment Potential FDI represents the expansion of

American enterprises to foreign countries in productions and investments

US being an insider, is increasingly critical in markets like India and China

Portfolio Investment Potential Both 3 countries have Significant

ammount of Portfolio Investment These create a positive global

dynamic for America

The New Triad

Why The New Triad?

Of the world’s top ten economies, India, China and US:

Constitute 70% of the total population (approx.)Share of the top three economies is 3/4th of the

world’s GDP (approx.)Present largest markets in the worldWill be largest resource consumersWill raise issues on environment and

sustainabilityAre going to shape the future geo-political

landscape

Conclusion

Forecast from Goldman Sachs says that India and China will dominate the economy in 2050, forming the new TRIAD.

The old TRIAD still remain for few years; The demand of US, EU and Japan will remain

level; The BRICS and new TRIAD will take over from

2020; Until 2050 the BRICS GDP will be twice big as

G7.

To finalize…

Thank you!