Threats and Opportunities Posed by China to Malaysia

Pages: 10 (2679 words) Published: November 20, 2011

BRIC or also referred to as the Big Four in economical terms, refers to the countries Brazil, Russia, India and China. These countries are grouped together because they seem to be all at the same stage of emerging into the global market scene. What is surprising is that BRIC countries now hold a quarter of the world’s economic activity.

The first person to use the term BRIC was Jim O’Neill from Goldman Sachs. He predicted that the BRIC economies would comprise for more than 10% of the global economic market by 2010. He believed that the BRIC’s combined GDP would surpass that of the G7 countries by 2032.

Europe and the United States were the world’s superpower in the economics scene from the Britain’s Industrial Revolution in the late 18th century to the 20th century. America at that time was responsible for 27% of the world’s GDP. The then China and India had only accounted for 4.5 and 4.2% of the world’s GDP. However, the Chinese and Indian economies are now emerging as potential superpowers causing a power shift from the western countries to the Asian Continent. The BRIC countries now have a combined wealth of $ 4.125 trillion compared to the United States’ $6.4 trillion.

Table 1: The Wealth of the BRIC countries

Source: Wealth X cited in The Wall Street Journal, 2011

There are many factors affecting the emerging of the BRIC. These countries supply very low cost goods, services and raw materials to the developed world. For example, China has established itself as a high growth and high investment giant by producing cheap goods for the western countries. Likewise, Russia, Brazil and India famous for the production of natural resources like oil and gas, mining and exporting agricultural goods, business and even IT services respectively.

The young age of these emerging markets also serve as a factor. They have young, dynamic and growing populations. In India alone, the population is set to reach half a billion by 2025 with the population being richer and better educated. Besides that, these markets are generally debt free. Although the development of these countries may be affected by short term treats, the long term drivers seem promising (The BRIC Project, n.d.).

China as a Superpower

In 2010, China’s Gross Domestic Product (GDP) growth was 10.456% totalling $5,745.13 billion and has been expected to grow to 11.79% by 2011 to $6,422.28 billion. China has also been forecasted to reach $9,982.08 billion in 2015.

China has a huge economy and is seen expanding at a rapid speed. In the last 30 years, China’s GDP has maintained an average growth of 8% per annum. During the said 30 years, China has been able to grow more than 10 times with its GDP reaching a total of $3.42 trillion in 2007. China’s population in 2010 was more or less 1.341 billion and is expected to reach 1.375 billion in 2015. China’s population accounts for around 19.37% of the world’s population. China’s unemployment rate stood at a low 4.1 % in 2010, a decline from 4.65% from the previous year and is predicted to further decrease to just 4 % in 2011. Forecasts for 2015 predict China’s unemployment rate to remain at 4 % from 2011 to 2015.

China is expected to experience the largest urban migration in decades with up to 70% of its population moves from the countryside to the urban areas. That would be more than 350 million people moving into China metropolises and conurbations. The urban population could reach to more than 1 billion.

Figure 1: Urbanisation in China from 1960 to 2010


Residents of China’s rural area move to cities to improve their standard of living as exports and wealth of the country increases with time. The infrastructure for accommodation, education and transportation are important factors of urbanisation. The development of these infrastructures in turn becomes the...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Opportunity and Threat Research Paper
  • Globalization: Threat or an Opportunity Essay
  • formation of malaysia Essay
  • Opportunities and Threats for Amazon.Com Essay
  • E-Business, Opportunities & Threats Essay
  • Essay about Opportunities and Threats for Starbucks
  • Opportunities, Threats Essay
  • Opportunity and Threats Essay

Become a StudyMode Member

Sign Up - It's Free