Rebalancing Act

As I noted Brazil is one of the most prospective economy in these days. Brazil, India, and China have a combined population of 2.5 billion-plus people, with younger and larger middle-class segments than their Western counterparts. Be aware of this markets and trends, and how Brazil, India, and China are weathering the global recession, the growth possibilities for American firms, and potential political barriers that may create obstacles for increased FDI and exports to these emerging market economies, and in specific about Brazil, is my mission now.

Enjoy this article October 6 Chicago Tribune at
http://www.chicagotribune.com/business/chi-tc-biz-cover2cp-1005-1006oct06,0,3469973.story

A rebalancing act U.S. firms sharpen focus on overseas consumers
WASHINGTON - -- With American consumers cutting back in response to the recession, many U.S. companies increasingly are looking outward, toward fast-developing countries like China, India and Brazil.But instead of seeing those countries primarily as cheap producers of goods, both American manufacturing firms and giant multinational corporations see them as potential customers for U.S. products and services. And it reflects what may be the beginning of a shift in the global economy, a rebalancing in which the world relies less on U.S. consumers and more on consumer spending in places such as China.The size of those potential markets dwarfs the domestic ones of most of the economically advanced nations. China, India and Brazil have a combined population of 2.5 billion-plus people, many of them young and increasingly affluent -- in contrast with the aging and far smaller populations of Western Europe, Japan and the United States.Some economists see Brazil's role as pivotal to helping Latin America out of the global recession. And Rio de Janeiro's winning bid for the 2016 Olympics should help in any recovery for the region. Much of the world is still extricating itself from the recession, but Brazil's economy is expected to grow by between 4 percent and 6 percent next year.What remains unclear is how large the benefit may turn out to be in terms of jobs and investments in the U.S. Many American companies are investing in production and other facilities near the new customers -- instead of shipping goods from U.S. facilities overseas. Almost no one doubts that Americans will reap some benefits. Stronger U.S. exports will boost the domestic economy, as they have over the last decade. Without their overseas customers, companies like Power Curbers Inc., a small construction-equipment maker in Salisbury, N.C., probably would have gone bankrupt in the recession."We're fortunate that infrastructure development is going on in other countries," said Dyke Messinger, Power Curbers' president. He said 75 percent of his sales this year are international, compared with 25 percent two years ago.Leaders of General Electric Co., believing the U. S. and other advanced economies face a prolonged period of slow growth, say they are banking more than ever on emerging economies. GE Chairman Jeffrey Immelt argued that the shift in the balance of consumption power -- from wealthy countries to the emerging giants -- calls for a different business model for companies like his to succeed.As populous nations such as China and India become a greater force in driving demand, the old way of developing products at home and distributing them worldwide won't cut it, Immelt wrote in the October issue of Harvard Business Review.Instead, he said, more of the products of the future need to be designed, built and marketed in those local markets, with decision-making power placed in local hands.Immelt does not address the implications of this for American employment, but the trend line may be apparent from the company's annual reports: In 2004, GE had 165,000 employees in the U.S. and 142,000 elsewhere. By the end of last year that was reversed: 152,000 in the U.S. and 171,000 outside.Such statistics underlie the rising overseas investment of U.S. corporations, and it's almost certain to rekindle politically sensitive issues of earlier years -- outsourcing, as well as U.S. tax and currency policies and other incentives that are tied to overseas investments and the repatriation of profits