Major Features of Economic Globalisation: Its Evolution & Current Trends

ByMohan Guruswamy

Centre for Policy Alternatives, New Delhi

www.cpasind.com

Brief History of WTO

The 50 years old multilateral trading system under GATT was transformed into WTO in 1995

WTO has 150 members, accounting for over 97% of World Trade

Over the past 50 years merchandise exports grew at an average of 6% annually

In 2000 total trade in the World stood at 22 times the level of 1950

Contd..

Brief History of WTO

From 1947 to 1994, GATT was the forum for negotiating lower customs duty rates and other custom barriers

Since 1995 it deals with specific sectors such as agriculture and textiles, state trading, product standards, subsidies and anti-dumping measures

Growth of World Trade since 1980

(Bn US $)

World 1980 1990 1995 2000 2001 2002 2003

Trade Value

3841 6897 10,216

12,967

12,537

13,080

15,237

Growth (%)

-- 79.56 48.12 30 -3.32 4.33 16.49

Export 1900 3386 5078 6375 6147 6438 7492

Import 1941 3511 5138 6592 6390 6643 7745

Source: Direction of Trade Statistics Year Book, 1987, 1997, 2002, 2004, IMF

Top Traders of the World

Country Value (Expo.)

Share (%)

Rank Value(Impo.

)

Share (%)

Rank

Germany

912.3 10 1 716.9 7.6 2

USA 818.8 8.9 2 1525.5 16.1 1

China 593.3 6.5 3 561.2 5.9 3

Japan 568.8 6.2 4 454.5 4.8 6

India 75.6 0.8 30 60.7 0.6 13

Source: Leading Exporters in World Merchandise Trade, 2004, World Trade Organisation website

*Values are in US $ bn

Growth of World Economy since 1980

Year Gross World Product (GWP)

(Trillion US $)

Per capita GWP (US

$)

Annual % Growth in GWP

Annual % Growth in Per capita

 

1980

26.8 6,042 -- --

1985

30.7 6,345 2.75 0.98

1990

36.3 6,867 3.4 1.59

1995

40.8 7,168 2.36 0.86

2000

48.6 7,985 3.66 2.18

2004

55.9 8,753 3.56 2.32

Source: World Watch Institute 2002 & World Economic Outlook Database, 2005, IMF

Comparison of Indian & Chinese Economy with the

World, 2003

  World India China

GDP (bn $) 34,577 570.8 1417

Per capita GDP ($)

5510 540 1100

Source: World Development Indicators 2005

Economic Growth of China since 1979

  1979 2004

GDP ($ bn) 177 1601

Per capita ($) 183 1100*

Annual GDP Growth (%)

6.2 (1952-78)

9.3 (1979-2004)

*Pertains to 2003

Source: China Economic Conditions, CRS Issue brief for Congress, 2005 & Outlook on the

Chinese Economy, Lawrence J. Lau, Stanford Univ. , USA

Economic Growth of India since 1960

  1960-80 1880-91 1992-2002

GDP Growth (%) 3.3 5.6 6.1

GDP Per capita Growth (%)

1.0 3.3 4.1

Source: Economic Survey 2004-05 & 10th Five Year Plan Documents

Economic Growth of India since 1980

  1980-81 1985-86 1990-91 1995-96 2000-01

2003-04

GDP (Rs. bn.)

4011 5140 6929 8996 11986 13183

Avg. Annual Growth (%)

-- 5.08 6.15 5.36 5.9 3.22

Per capita (Rs.)

5352 6082 7321 8489 10313 11672

Avg. Annual Growth (%)

-- 2.59 3.77 3.04 3.96 3.14

*Data pertains to 1993-94 Constant Prices

Source: National Account Statistics 1950-51 to 1992-93 & 2004 & Economic Survey 2002-03

Growth of Manufacturing in China

 

Industrial Growth %Industrial Ownership Trends

(%)

  1952-79 1979-2000 1979 2000 2000

Light Industry

7.83 11.23 22 (collectiv

e)

14 (collectiv

e)

56 (other types)

Heavy Industry

11.37 11.1 78 (state owned)

24 (state owned)

6 (individua

l)

Source: Outlook on Chinese Economy,2002, Dept. of Economics, Stanford University, USA

Growth of Manufacturing in India

  1980 1985 1990 1995 2000 2003

Manufacturing(Rs. bn)

639 897 1342 1847 2341 2581

% of GDP 15.93 17.44 19.36 20.53 19.53 19.57

% Growth -- 7 8.39 6.59 4.85 3.3

*Figures are at 1993-94 constant prices

Source: National Account Statistics, Series 1950-51, 1992-93 & 2004

China & India’s Manufacturing vis-à-vis World

  1990 (billion $)

2003 (billion $)

Growth of Manu. Sector

(%)

as % of World Manu.

in 1990

as % of World Manu.

in 2003

World 4,772 6,563 2.48 -- --

China 117 553 12.68 2.45 8.42

India 54 96 4.55 1.12 1.46

Source: Data calculated from World Development Indicators 2005

US Trade Deficit TrendsYear Export Import Trade Deficit

1980 272 291 -19

1985 290 411 -121

1990 535 617 -81

1995 794 891 -96

2000 1071 1450 -378

2001 1007 1370 363

2002 977 1398 -421

2003 1023 1517 -495

2004 1151 1769 -618

* Value in Billion US $Source: Foreign Trade Division, US Census Bureau

External Sector of India, China & ASEAN Countries

Country Exports Imports Current Account Balance

Foreign reserves

ASEAN 466 383 57.2* 236

China 438 413 68.7 711

India 55 70 -6.4 127

Source: ASEAN Finance & Macroeconomic surveillance Unit, Statistical Outline of India 2004 -05 & The Economist

August 27, 2005

*Data of Indonesia, Malaysia, Singapore, Thailand & Philippines

China’s International Trade since 1980

Year Export Value (US $ bn)

Import Value (US $ bn)

Trade as % of GDP

1980 18.1 10.9 6

1985 27.3 42.2 9

1990 62.1 53.3 16.1

1995 71.9 63.7 17.7

2000 249.2 225.1 23.1

2002 325.6 295.1 26.1

2003 440.0 412.0 31.5

2004 438.0 413.0 --

Source: China Foreign Economic and Trade Statistics Year book, various issues

China’s Trade Statistics, 2003 (US$ bn)

Country Export Import Total Trade

% of Total Trade

Japan 60 74 134 15.7

USA 93 34 127 14.9

EU 15 Countries

72 53 125 14.7

S. Korea 21 43 64 7.4

ASEAN 31 47 78 9.2

Others 163 161 324 38.1

Source: Direction of Trade Statistics, 2004, IMF

India’s International Trade since 1981

Year Export Import Export % of GDP

Import % of GDP(Rs. bn) (Rs. bn)

1981 78 136 1.83 3.2

1985 118 197 2.28 3.82

1990 326 432 4.69 6.23

1995 1064 1227 10.03 11.57

2000 1596 2155 8.46 11.43

2002-03 2551 2972 11.37 13.25

2003-04 2916 3540 11.63 14.12

Source: Ministry of Commerce & Industry, Govt. of India

India’s Trade Statistics (Rs. bn)

Country 2004-05 2005-06 Share Growth (%)

USA 239 262 16.46 9.68

EU 292 356 22.42 22

SAARC 72.5 81.7 5.14 12.72

ASEAN 179 231 14.55 29.37

AFRICA 76.5 112 7.07 46.96

CHINA 57.4 88 5.53 53.17

Total 916.4 1130.7 -- 23.38

Source: Economic Division, Dept. of Commerce, Ministry of Commerce, Govt. of India

India’s External Financial Position (bn US $)

Exports 55

Imports 70

Trade Balance -15

Workers Remittances

21.7

Current Account Balance

-6.4

Source: ASEAN Finance & Macroeconomic surveillance Unit,

Statistical Outline of India 2004 -05 & The Economist August 27, 2005 &

www.apcprocess.net

Source Regions of Workers’ Remittances to India

Year Africa

America Asia Europe Int. Insti.

Total

(US $ bn)

1997-98

2.3 37.1 31.3 26 3.3 11.88

1998-99

1.7 36.7 37.1 23.6 0.9 10.34

1999-2000

1 45.5 31.9 20.6 1 12.29

2000-01

1.3 44.9 34.3 19 0.5 12.87

2001-02

4.5 48.2 23 23.2 1.1 12.19

2002-03

0.6 51.1 22 25.8 0.5 15.17Source: Report on Currency & Finance 2002-03, RBI

Petroleum Consumption in India & China since 1980

(mn barrels per day)

Year India China World

1980 0.64 1.77 63.11

1985 0.89 1.89 60.9

1990 1.17 2.3 66.58

1995 1.57 3.36 70.02

2000 2.13 4.8 76.95

2003 2.32 5.55 80.1

Source: Annual Energy Review, 2004, Energy Information Administration, USA

Price Trends of World Crude Oil since 1983

Year Price (US $ per barrel)

Percent decrease/

increase

1983 31.35 --

1987 20.48 -34.76

1991 20.76 1.36

1995 17.18 -17.2

1999 19.39 12.86

2003 30.4 56.78

2005 58.75 93.25

Source: Energy Information Administration, US Dept. of Energy

*Prices of the above are of July 1st of each year

China’s Oil Dependence 2004-05 (Million Metric Tonnes)

Domestic Production

180

Import 145

Total Consumption

325

Import Value (US $ bn)

62.78

Source: Energy Intelligence Agency, Govt. of USA

India’s Oil Dependence (in million metric tonnes)

  1999-2000 2001-02 2004-05

Production 31.9 32 34.0*

Import 57.8 78.7 98.9**

Total Consumption

89.7 110.7 132.9

Import Value in US$***

$ 10.4 bn $ 13.4 bn $ 36.3 bn

*Extrapolated from data of April 2004 to August 2004 **Provisional Figures, ***Import Value calculated on the basis of prevailing World Crude Prices as on the financial year mid-point, Oct 1st.

Source: Basic Statistics on Indian Petroleum & Natural Gas, 2003-04, Ministry of Petroleum & Natural Gas, Press Information Bureau, Ministry of Statistics & Programme

Implementation, Govt. of India & US Dept. of Energy

FDI Flow into China since 1979

Year FDI Flow (US $ bn)

Annual Avg. Receipt

Annual Avg. Increase (%)

(US $ bn)

1979-83 1.8 0.36 55.4

1984-91 21.5 2.7 27.2

1992-99 282.6 35.3 32.1

1999-2003 191.5 47.9 78.91

Source: OECD, 2000 & World Investment Report 2004, UNCTAD

FDI inflow into India since 1990

Year FDI Flow (US $ bn)

Annual Avg. Receipt

Annual Avg. Increase (%)

(US $ bn)

1990-95 4.3 0.86 --

1995-2000 13.1 2.6 24.95

2000-03 11.1 3.7 12.19

Source: World Investment Report 2004, UNCTAD, World Bank 2002 & Statistical Outline of India 2004-05, TATA

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