The Boao Forum for Asia
  The Development of Emerging Economies Annual Report 2011

  University of International Business and Economics Press

ACKNOWLEDGEMENTS

    Organized by the Boao Forum for Asia secretariat, The Boao Forum for Asia The Development of Emerging Economies Annual Report 2011 is written by researchers of the Institute of World Economics and Politics, CASS. Mr. Zhou Wenzhong, general secretary of the Boao Forum, and Yao Wang, executive director of the forum, have taken pains to offer insightful thoughts to ensure the smooth compilation of the report.

    The chapter design and introduction were completed by Zhang Yuyan, director of the CASS Institute of World Economics and Politics. Dr. Huang Wei finished the first three chapters. Dr. Xu Xiujun wrote the fourth and fifth chapters. Dr. Lu Jin wrote the sixth chapter. Dr. Xie Laihui contributed the discussions on climate change to the sixth chapter. Zhang Yuyan and Dr. Huang Wei collaborated to finish the seventh chapter. Dr. Huang Wei updated the manuscript and finalized the report. Dr. Xu Xiujun and Dr. Lu Jin also contributed to the revision of the report.This report does not necessarily represent the views of the Boao Forum. The authors are responsible for any errors and mistakes in the report.

     We are grateful to Zhang Yansheng, director of the Institute for International Economics Research under the National Development and Reform Commission, Pei Changhong, director of the Institute of finance and Trade Economics, CASS, Gu Yuanyang, former director of the Institute of World Economics and Politics, CASS, Lin Guijun, vice-president of the University of International Business and Economics (UIBE), Liu Yuanchun, deputy dean of the School of Economics of Renmin University of China, Tang Min, vice secretary-general of the China Development Research Foundation, Wang Yuesheng, president of the International Economic Research Institute of Peking University, Ms. Zhou Xiaojing, director of the Asia-Africa Development Research Institute, Development Research Center of the State Council, and Wang Jun, researcher with the China Center for International Economic Exchanges, who have shared their valuable ideas and suggestions with the authors. Meanwhile, we are also grateful to professor Liu Jun, president of the Beijing University of International Business and Economics Publishing Co., Ltd., and Ms. Jiang Yong from the Beijing University of International Business and Economics Publishing Co., Ltd., without whose support this report would not have been finished.

     Sincere thanks are due to the ChinaCoal Pingshuo Coal Co., Ltd., which has provided generous support for the compilation and publication of this report.

FOREWORD

    The Boao Forum for Asia, as an international organization, has become an important platform for dialogues on crucial Asian and global issues. In the past year, the international landscape has undergone some major changes, including the elevation of major international dialogue platforms, adjustment of the voting shares in major international organizations and changes in the relative economic strength of some countries. The development of the emerging economies has become an increasingly important driving force for the global economic development and attracted unprecedented attention from the world.

    Since 2010, the forum has started to release annual report on the development of emerging economies and, for the first time, defined E11(11 emerging economies). The Boao Forum Annual Report 2011 is a continuity and extension of the previous report. It focuses on the E11 economies which best represent the emerging economic group. It introduces and compares their basic endowment of resources, social development and economic conditions, and in particular, analyzes their changes in the international status and their economic prospects. The report has provided a more comprehensive perspective for looking at and analyzing the E11 economies as it includes analysis of their overall economic development potentials and introduction to the recent performance of individual economies. It not only provides an economic comparison between the E11 and G7, but describes recent internal economic links between the E11 economies. Moreover, it analyzes major challenges facing those countries. The report will help readers better understand the basic conditions, potentials and possible hurdles facing the development of emerging economies, promote development of emerging economies and strengthen coordination among them, so that they can help push a more equitable, fair and balanced growth track of the world.

     I am grateful to all the friends who have been involved in the compilation of the report and wish our readers could feed back to help us do a better job in the future.

Zhou Wenzhong
Secretary General
Boao Forum for Asia

Table of Contents

ACKNOWLEDGEMENTS… ……………………………………………………………………………VIII
FOREWORD………………………………………………………………………………………………IX
INTRODUCTION………………………………………………………………………………………… X
Chapter 1 Economic Basics of the E11……………………………………………………………… 1
1.1 Overall Economic Development……………………………………………………………………1
1.2 Basic Price Situation…………………………………………………………………………………6
1.3 Finance and External Financial Position…………………………………………………………7
Chapter 2 Changing International Status of the E11……………………………………………… 13
2.1 Changing International Status…………………………………………………………………… 13
2.2 Changing Global Competitiveness………………………………………………………………16
2.3 Corporate Rankings of the E11 Economies……………………………………………………18
Chapter 3 Overall Economic Performance of the E11………………………………………………25
3.1 Overall Economic Performance……………………………………………………………………25
3.2 Analysis of Growth Impetus…………………………………………………………………………29
3.3 Overall Trade and Investment Performance………………………………………………………35
Chapter 4 Economic Cooperation Among the E11 Economies……………………………………39
4.1 Economic Cooperative Mechanism of the E11……………………………………………………39
4.2 Trade Links Among the E11 Economies…………………………………………………………44
4.3 Direct Investment Among the E11 Economies……………………………………………………52
4.4 Financial Cooperation Among the E11 Economies……………………………………………… 56
Chapter 5 Country Report of the E11 Economies…………………………………………………… 59
5.1 Argentina………………………………………………………………………………………………59
5.2 Brazil……………………………………………………………………………………………………60
5.3 China……………………………………………………………………………………………………61
5.4 India……………………………………………………………………………………………………63
5.5 Indonesia……………………………………………………………………………………………… 64
5.6 Korea……………………………………………………………………………………………………65

IV
5.7 Mexico……………………………………………………………………………………………………66
5.8 Russia…………………………………………………………………………………………………68
5.9 Saudi Arabia……………………………………………………………………………………………69
5.10 South Africa…………………………………………………………………………………………70
5.11 Turkey…………………………………………………………………………………………………71
Chapter 6 Challenges Facing the E11 Economies……………………………………………………73
6.1 Challenge of Excess Liquidity for the E11…………………………………………………………73
6.2 Challenge of Unbalanced Current Account for the E11…………………………………………75
6.3 Challenge of Fluctuating Commodities Prices for the E11………………………………………78
6.4 Challenge of Climate Change and Environment for the E11……………………………………80
6.5 Challenge of Participation in Global Governance for the E11……………………………………83
Chapter 7 Epilogue…………………………………………………………………………………………87
References…………………………………………………………………………………………………89

V
List of Tables
Table 1.1…Foreign Exchange (% World Foreign Exchange Reserve)………………………………10
Table 2.1…International Monetary Foundation SDR Quota and Votes……………………………15
Table 2.2…International Bank for Reconstruction and Development Votes Before and After Reform………………………………………………………………………………………………………16
Table 2.3…Investors’ Top 10 Regional Preference………………………………………………… 19
Table 2.4…E11’S Enterprises in 2009 and 2010 Fortune Top 500………………………………20
Table 2.5…2009-2010 Top 20 World Banks Based on Tier 1 Capital………………………………23
Table 3.1…Comparison of Key Economic Activity Indicators in Global Economic Trough……… 25
Table 3.2…Trend Forecast in E11 and G7'S Population…………………………………………… 34
Table 4.1…Economic Cooperation Regimes Among E11 Economies…………………………… 40
Table 4.2…Partial Multilateral Economic and Trade Agreements Among E11 Economies…… 41
Table 4.3…Partial FTAs Between E11 Economies…………………………………………………… 41
Table 4.4…Eexports Between E11 Economies (Jan.-Jun. 2010)……………………………………45
Table 4.5…Imports Between E11 Economies (Jan.-Jun. 2010)……………………………………46
Table 4.6…Growth Rates of Exports and Imports Between E11 Economies (Jan.-Jun. 2010)…47
Table 4.7…Trading Ratios of E11 Economies (Jan. - Jun. 2010)……………………………………49
Table 4.8…Rank by the Volume of Trade Between E11 Economies (2009)………………………50
Table 4.9…Trade Balance Between E11 Economies (2009)……………………………………… 51
Table 4.10…FDI Flows and Stock of E11………………………………………………………………53
Table 4.11…Indian FDI Inflows from Other E11 Economies…………………………………………54
Table 4.12…FDI Flows Between China and Other E11 Economies………………………………55
Table 4.13…Bilateral Agreements on Currency Swap Between China and Other E11 Economies…………………………………………………………………………………………………58
Table 6.1…E11&G7 Economies’ Major Stock Index of 2010………………………………………74
Table 6.2…CA/GDP of E11 and G7: From 2000 to 2010 ……………………………………………76

List of Figures
Figure 1.1… GDP (PPP, Constant 2005 International US$)……………………………………………2
Figure 1.2… GDP Growth Rate (PPP, Constant 2005 International US$)……………………………2
Figure 1.3… Nominal GDP (Current US$)………………………………………………………………3
Figure 1.4… Real GDP Per Capita (PPP, 2005 International US$)……………………………………4
Figure 1.5… Nominal GDP Per Capita… ………………………………………………………………5
Figure 1.6… Change of Domestic Consumer Price Index, 2007-2009………………………………6
Figure 1.7… Annual Change in Nominal Effective Exchange Rate……………………………………7
Figure 1.8… Annual Change in Real Effective Exchange Rate………………………………………7
Figure 1.9… General Government Gross Debt in Percent of GDP……………………………………8
Figure 1.10… Fiscal Surplus in Percent of GDP…………………………………………………………8
Figure 1.11… Net International Investment Position in Percent of GDP……………………………9
Figure 1.12 International Reserves………………………………………………………………………10
Figure 2.1… IMD World Competitveness Index Ranking of E11……………………………………17
Figure 2.2… WEF Global Competitiveness Index Ranking of E11…………………………………18
Figure 2.3… Emerging Economies in First 20 Ranking of FDI Confidence Index…………………19
Figure 3.1… G7’S and Most of E11’S Composite Leading Indicators (Arithmetic Average)…26
Figure 3.2… E11’S and G7’S Real GDP (PPP) and Growth Rate (2005 Price)………………27
Figure 3.3… E11’S and G7’S Real GDP (Exchange Rate) and Growth Rate (2000 Price)…28
Figure 3.4… E11’S and G7’S Nominal GDP Per Capita …………………………………………28
Figure 3.5… E11’S and G7’S GDP Per Unit of Energy Use ………………………………………29
Figure 3.6… E11’S and G7’S Total Factor Productivity Growth…………………………………30
Figure 3.7… Research and Development Expenditure in E11 and G7 (% of GDP)……………… 30
Figure 3.8… Growth Rate in E11’S and G7’S ICT Capital Services……………………………31
Figure 3.9… Contribution of ICT Capital Services Growth in GDP Growth in E11 and G7……… 32
Figure 3.10… Growth Rate in E11’S and G7’S Non-ICT Capital Services……………………32
Figure 3.11… E11’S and G7’S Growth Rate in GDP Per Person Employed (2009 Price)……33
Figure 3.12… Total Labor Force of E11 and G7………………………………………………………33
Figure 3.13… E11’S and G7’S Population Aged 15-64 in Percent of Total Population………34
Figure 3.14… E11’S and G7’S Goods Exports and Imports (F.O.B.)……………………………35

VII
Figure 3.15…E11’S and G7’S Service Trade in Percent of Total Trade…………………………36
Figure 3.16…E11’S and G7’S Current Account, N.I.E. ……………………………………………37
Figure 3.17…Inward and Outward FDI Stock of E11 and G7…………………………………………37
Figure 3.18…Net FDI Inflows of E11 and G7……………………………………………………………38
Figure 4.1…Bilateral Investment Treaties Between E11……………………………………………56
Figure 6.1…CPI Growth Rate Year-on-Year: 2009Q3-2010Q2………………………………………74
Figure 6.2…Merchandize Prices Index of Different Categories………………………………………78
Figure 6.3…Global Petroleum Price Trend(From Jan., 2000 to Nov., 2010)………………………79
Figure 6.4…Average Growth Rate of Fuel Combustion and GDP (PPP):2001-2008……………81
Figure 6.5…CO2 Emission Shares of E11 and G7(% World): 2000-2008…………………………81
Figure 6.6…Carbon Emission Per Capita of E11……………………………………………………82
Figure 6.7…Carbon Emission Growth Rate and GDP (PPP) of E11 and G7: 2000-2008………82
Figure 6.8…Carbon Intensity and Its Change Rate of E11 and Developed Economies…………83
Figure 6.9…E11 and G7 Economies Votes of IMF(%) and Votes of World Bank(%) of 2010……85