Emerging economies become engine of global economic recovery and growth

Editor's note: Liu Xu is an executive director at the Center for International Energy and Environment Strategy Studies, Renmin University of China. The article reflects the author's opinions and not necessarily the views of CGTN.

The cumulative rise of emerging economies (also known as emerging market countries) is an important feature of the 21st century global landscape. According to a study by McCarthy & Company in 2018, 18 of the world's 71 emerging economies have outperformed global benchmarks and their peers, with their per capita GDP growing at an average rate of more than 3.5 percent per year over the past 50 years. 

The growing influence of the BRICS cooperative mechanism, of which major emerging economies are members, is attracting more emerging economies to join, garnering widespread international attention in the process. In this way, the rise of emerging economies has undoubtedly disrupted the status quo, revolutionizing the world economic and political landscape as we know it.

Emerging economies have contributed significantly to global economic growth. According to the World Bank database, the average GDP growth rates of China and India, the two largest emerging economies, have reached 9.1 percent and 5.9 percent, respectively, over the past 40 years, far exceeding the world average over the same period. The rapid, stable and sustained economic growth of these two countries has pushed up the share of emerging economies within the global economy as a whole. 

Compared with major developed countries, the economic influence of emerging market countries is increasing significantly, and the world economic pattern shows the trend of the East rising and the West declining. From 1990 to 2022, the share of BRICS countries within the world's GDP increased from 10.43 percent to 25.64 percent. In contrast, the GDP share of the three major developed economies, the United States, the European Union, and Japan, continued to decline from 53.83 percent in 2008 to 45.32 percent in 2022. The economic weight of emerging market countries, represented by the BRICS countries, continues to grow, acting as an important catalyst driving the world economic landscape towards a new balance.

The potential impact of the emerging market spillovers through trade on global growth has tripled since 2000. Declining productivity in some G20 emerging markets could pull down global output by more than three times as much as in 2000. The growing role of emerging markets means that other countries can help to support world economic development. A possible acceleration of growth in these countries could have positive global spillover effects, pushing the world economic growth rate up by 0.5 percentage points. Faster economic growth in emerging markets has been accompanied by an acceleration of structural transformation, especially in developing countries with populations in the hundreds of millions, such as China, India and Brazil, where structural changes in the economy, represented centrally by the rapid development of industrialization and urbanization, have led to the bridging of divides between people, the gap between urban and rural development, among many others.

The economic growth of emerging economies and their increased share in the global economy have prompted them to play a greater role in international affairs. The voice of the Global South is increasingly recognized by the international community, where their influence is cast further. With the assistance of international mechanisms representing the interests of emerging economies, such as the BRICS cooperation mechanism and the Shanghai Cooperation Organisation, their voices have been amplified. Emerging economies are also playing a more important role, using the G20 platform to participate in and influence global governance.

At the same time, these economies face challenges for their future development. The external environment for emerging economies has deteriorated as a result of weak economic growth and high inflation in developed ones. The development dynamics within emerging market countries have become more varied and polarized, and economic cooperation among them may fluctuate, with a possible shift in coordinated action in the area of global economic development. Global geopolitical conflicts have not slowed down, and the Russia-Ukraine conflict is likely to become protracted, while geopolitical conflicts in other regions or at certain times of the year are likely to erupt or intensify, which on the whole has increased the uncertainty in the environment for the economic development of the emerging market countries. The trend of anti-globalization and trade protectionism still continues, and even increases in spatial scope and intensity. In particular, the U.S. initiated "trade war", "science and technology war" and "information war" against China may continue for the foreseeable future.

Emerging market countries tend to have similar development goals, while also navigating a highly volatile international environment. Emerging countries will continue to carry out and strengthen economic cooperation in line with their respective development aspirations. Building upon this, warming bilateral relations will further enhance the momentum of their economic development. Emerging economies still have large comparative advantages in terms of population and labor. Considering that these countries are on their way to becoming high-income countries, the size and youth of their populations mean that the countries are able to form closer economic and trade exchanges in terms of product demand and factor supply. Emerging economies need to fully explore their inherent complementary advantages, accelerate the restructuring of their respective domestic economies, promote scientific and technological innovation, complement each other's strengths and advantages, so as to form a win-win pattern in the division of labour and cooperation, providing favourable conditions long into the future.