After embarking on a buying spree of overseas companies over the past year, emerging countries such as China and Dubai are poised to be stronger players in the world economy and see their competitiveness leap ahead next year, the Switzerland-based business school Institute for Management Devel-opment (IMD) said yesterday.
Thanks to the huge and rapid accumulation of foreign currency reserves, emerging nations have been actively buying industrial assets abroad and become new, vital players in the global market, IMD said in a press release.
Companies that have amply demonstrated such ambition include Chinese home appliance giant Haier Group (
"They have the skills, the connections and huge amounts of money ... new players are blossoming everywhere, and Western countries are in the hot seat," IMD said in the release.
With foreign currency reserves of more than US$1 trillion, China is now buying industrial assets, especially all the energy assets it can get its hands on. India is playing the IT card with its strong software and service companies, while Dubai is diversifying in everything from shipping to finance, IMD said.
The buying frenzy and emerging power will be the focus of the 2007 IMD World Competitiveness Yearbook, which is scheduled to be released in March, it said.
China ranked as the 19th most competitive country in this year's competitiveness report, up sharply from 31st place last year. India was ranked No. 29 and Singapore was in third position last year.
The consequence is "a new world of competitors, essentially from Asia, Russia and the Gulf countries, [that] is learning to stand on its own feet and to operate within its own borders," IMD said.
The buying spree will not stop next year and large competitive superpowers will want to use their economic muscle on the political scene, IMD said.
China's move in extending its relations in Africa and Russia, which is using its energy supplies as a lever in Europe, are an example, it said.
While these emerging countries have significantly strengthened their competitiveness, Taiwan appears to be lagging behind.
Taiwan ranked No. 18 in the IMD's competitiveness report this year, down from No. 11 last year, as its rating in four major areas -- economic performance, government efficiency, business efficiency and infrastructure -- all fell.
"Half of the reason for the drop is that other countries are moving ahead much faster," Suzanne Rosselet, deputy director of the IMD World Competitiveness Center that publishes the report, told the Taipei Times in October in Geneva.
To address the problem, the Taiwanese government should be consistent in policymaking and make sure that the policies are executed, as a negative conception of the government's volatile policies was a major reason for the fall in Taiwan's ranking, she said.
Political instability and overregulation in the field of business also need to be addressed, she said.
Rosselet warned though that over-dependence on China could present a risk. Taiwan and China are intertwined economically, which poses both opportunities and challenges. It is up to the government to decide which comes first to benefit the country, Rosselet said.
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