Thursday, 01 January, 2014
Clichéd as it is, I can’t pass up the opportunity to use the first newsletter of 2015 to give a few predictions for the year ahead. I have three things I’ve got my eyes on as key trends for 2015: supply chains evolving, social policy in emerging markets, and new geopolitical powers.
First, supply chains in 2015 will continue to be affected by rising wages in China, as well as a re-evaluation of risk that will lead to shorter supply chains and an advantage for less risky countries. Competition for the next wave of manufacturing and services outsourcing, along with a diversification of demand sources, will change the geography of trade.
Second, the rising middle class and accelerating demographic change will push social policy in emerging markets up the agenda. More migration will happen in places that are not ready for it, and the impact of demographics on labour markets will bite in more places at lower income levels that in the past. Health, education and pension spending will rise rapidly in emerging markets —especially in Asia— while rising incomes will start to change attitudes towards race, gender, the environment and sexuality in more countries.
Finally, we will see more tensions and opportunities from the rise of new powers. The US has yet to accommodate these quickly enough, while the new powers have not yet shown sufficient maturity on the world stage. China’s rise will cause unease, and tensions in the South China Sea will escalate, while previously weak countries like India will want to—and be expected to—play a more global role.
What are your predictions for 2015? Let me know your thoughts on Twitter @Baptist_Simon or via email on email@example.com.
Best regards,Simon Baptist
Chief Economist and Asia Regional Director