Certainties and Uncertainties Emerging Economies Bring to World Economic Recovery

The global recovery remains fragile and subject to a number of uncertainties. Government indebtedness, high employment, inflation may wreak havoc on the international system once again.

But vigorous GDP growth of emerging economies brings the world a light of hope and some certainties. How do economists view the contribution of emerging economies to the recovery of the world economy in the coming years?

Our reporter Zhang Cheng has more.

At the ongoing Boao Forum in south China, emerging economies have caught the most eyeballs from economists coming from the US, Japan, and China.

Huang Yasheng is a professor at Sloan School of Management, MIT. He says when evaluating a country's economy in the short term, speed is a key gauge, but for a longer term, the economic scale is a more crucial gauge.

"Is the world economy really diversified? If you take a look at BRICS, the combined GDP of Brazil, Russia, India and South Africa combined is less than China. I think instead of saying the economy is diversified worldwide, I'd rather say China's economy is diversified."

Huang says people overrated the diversity of emerging economies. Among the BRICS nations, Brazil and Russia are quite dependent on oil and other raw materials for GDP growth. China, to some extent, has boosted their GDP increase. However, they are lacking an independent growth mechanism to ensure its sustainability.

"The so-called 'economic diversity' of emerging markets is mainly reflected in production, not consumption. Though consumption growth is increasing in the emerging economies, the consumption amount is relatively low. We should clearly realize the limitations of emerging markets' economic growth."

Huang adds that China, as the biggest emerging economy, has witnessed an estimated 80 percent of electricity consumption from enterprises, and 20 percent from individuals and families.

But the situation is the opposite in the US. So he says that it is certain that emerging economies' emphasis turning from production to consumption will definitely influence the world economy.

Timothy Bond, chief economist at Asia Pacific, Bank of America Merrill Lynch agrees with Professor Huang. He believes emerging economies are on the right track.

"I think emerging markets emerged as one of the pillars of the world economy. Our global growth forecasts are expecting 4.4% global growth in 2011. And that's driven by rapid growth in emerging market. We do need to see a change in the structure of the emerging market economies and China, in particular, we need to see consumption play a more important role. I think they will move in that direction."

Economists also point out that emerging economies did a good job to recover from the international economic meltdown, but some residual uncertainties, such as inflation, will influence their play in the world economic recovery.

For CRI, I'm Zhang Cheng, in Boao.