What is the future of the EMs?

The G20 meeting showed globalisation could be more vulnerable than what we previously expected. The EMs (emerging markets) have been benefited from globalisation for decades, and the currently increasing populism and protectionism will drag our process of globalisation and even we may face some strong reverse movement in the near future. China plays an important among the EMs, it is the third largest economy and has the largest population in the world. This makes China differentiate itself from other EMs. Therefore, when the world enters a possible era of deglobalization, the future of China can be quite different from other EMs.

Recent years, we can see there are many giant companies including Alibaba, Wanda, Tencent and etc. Though these companies have global businesses, they focus a lot more in their domestic markets. In addition, the potential consumption power of the Chinese population is enormous. Many countries welcome Chinese tourists as they usually buy many products and help to boost exports. The two main engines of the current Chinese economy are retail sales and investment. When the Chinese population becomes more wealthy, the consumption will increase sharply and boost the Chinese economy further. I think that in China, some welfare policies should be designed to narrow the wealth gap within the population in order to the boost the consumption power of the social lower classes. However, other EMs do not have comparable domestic markets, when it enters an era of deglobalization, their dependence on exports becomes crucial and will damage their economic growth. India is another exception as it has a similar size of the population but has an even wider wealth gap which gives it a weaker position in the future development.

Overall, the EMs' economies will be on a declining trend when it enters an era of deglobalization. However, the size of the population will become a determinant factor when the economy becomes a relatively closed one, as larger population will build up a large market to generate more wealth.