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Perspectives on Global Development 2013

Industrial Policies in a Changing World

image of Perspectives on Global Development 2013

First launched in 2010, Perspectives on Global Development (PGD) is OECD’s annual publication on emerging development issues. The PGD takes the new geography of economic growth, poverty and power as a point of departure. Each year, the report identifies, analyses and provides evidence and policy solutions to the most pressing global development challenges in the new multipolar world. It provides an overview of global trends and structural transformations in the world economy and informs policy makers in developing countries on the implications in the formulation and implementation of national policies. Each year, the report focuses on a different topic covering diverse socio-economic facets of development from trade, development finance, infrastructure, production development and innovation to gender, employment, migration, fiscal and social policies.

During the past decade, the global economic centre of gravity has shifted eastwards and southwards, creating new opportunities for economic co-operation, trade and investment but also new challenges. This “shifting wealth” is a game changer for economic policy and is at the centre of the first three editions of the Perspectives on Global Development, which document the phenomenon (PGD 2010) and analyse its implications for social cohesion (PGD 2012) and productive growth strategies (PGD 2013).

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Channels of shifting wealth

OECD Development Centre

Shifting wealth – driven primarily by China’s rise but also by the dynamism of some other developing countries – has been a major force behind reshaping global economic relations. To adopt the right strategies in this changing landscape, it is useful to understand the channels through which countries are affected. The impact of shifting wealth on other countries – through the channels of trade, investment, financial and knowledge flows – will be shaped by the combination of the type of endowments and the strategies adopted to integrate into the global economy. The challenges countries face and their potential arsenal of policy tools also hinge on the combination of these factors. Countries that are rich in natural resources of which China is in great need have enjoyed rising terms of trade, increasing exports and improving current account balances, but have also seen their competitiveness challenged. Countries that share supply chains with China are benefiting from an ever-increasing demand for their exports but have also been facing increasing competitive pressure as China has been entering into the production of an ever-widening range of goods. Services exporters in developing countries have often been less successful in meeting China’s large appetite for imports of services. In the medium term China’s changing growth pattern will offer new challenges for developing countries: slower, but stable, demand for raw materials and higher demand for consumer goods and for a wide range of services.

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