Growing Economies

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Level: AS Levels, A Level, GCSE – Exam Boards: Edexcel, AQA, OCR, WJEC, IB, Eduqas – Economics Revision Notes

There has been a rise of emerging markets such as India and China since WW2, leading to a change in the pattern of trade
The manufacturing sector of the UK has declined and lead to manufactured goods being produced in other countries such as China – leading to the industrialisation of China and India
India’s share of textiles and clothing fell from 35% in 1995 to 16% in 2005
India’s manufacturing sector produce more engineering goods – this has resulted in the UK exporting fewer goods
The trade deficit that the US has with China has reduced, addition to China’s trade surplus – this is because of a change from export-led growth to growth fuelled by domestic consumption
India and China’s share in agriculture, mining and fuel has fallen, however both countries are important for capital in the Euro area
India struggles to sustain food grain production if there is rainfall, due to its poor irrigation system – leading to higher prices
There are also inefficiencies in India’s transport, communication and healthcare due to the frequent power cuts & electricity shortages
China leads the Asian Infrastructure Investment Bank and funds Asian energy, transport and infrastructure
The Chinese Government prioritise Infrastructure Development and this is believed to be one of the reasons for the development gap between China and other emerging economies
In 1990s and 2000s, China invested 9% of its GDP into infrastructure, in comparison to other economies which only invested 2%-5%

The top recipient of China is Africa – it received 45.7% of China’s foreign aid by the end of 2009
Africa’s saving rate is 17%, while other middle income countries have a saving rate of 31%
Since Africa have high borrowing costs, it is harder for them to gain funds, reducing capital investment
The current population in Africa is 1.1 billion and this is expected to double by 2050, making it harder to reduce poverty and hunger
60% of Africa’s exports consist of mining and primary products

Quick Fire Quiz – Knowledge Check

1. Explain how Asia (China and India) is as a growing economy (8 marks)

2. Explain how Africa is as a growing economy (6 marks)

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