Ignore the words of investing’s greatest brand marketeer at your peril. The man who gave us emerging markets now suggests that the linchpin of growth in the world is moving back to the developed world. The implications are profound.
Antoine van Agtmael, for many years an official of the International Finance Corporation, coined the term “emerging markets” in 1982. He wanted to foster equity investing in the developing world, and end a dangerous addiction to debt.
His proposed response was for the IFC to sponsor the first ever emerging markets equity fund. Most investors, even at large institutions, lacked the resources to hunt bargains in distant markets. But a diversified portfolio of stocks from across the emerging world might solve this problem.
What, though, to call it? A debt crisis was swirling around “Lesser Developed Countries”. The initials LDC were used almost as widely as EM today, and the label could not possibly be used. Nobody was likely to buy into a “Third World Fund” either.
A weekend’s thought produced the phrase “emerging markets”. No financial branding can ever have been more successful. Mr Van Agtmael himself has been an evangelist of emerging markets, ardently suggesting that the most successful companies in EM have the smarts, after learning to survive in their home countries, to become dominant multinationals.
There is symbolism, then, in his new project to document how and why the global advantage is shifting back to the US.
There are complaints in Asia about competition from the US. Manufacturers that had moved to China are moving back to Mexico, or even to the US itself. In China, where the priority is to raise real wages (and erode competitiveness), he points out that self-satisfaction after the 2008 crisis has given way to unease. Wages have risen 400 per cent since 2001, according to Ernst & Young, while US unit labour costs have dropped 12 per cent since 1995.
Fundamentally, the US is more competitive than had been thought, while China is less so. What Mr Van Agtmael calls the “creative response” from the west has come sooner than he anticipated. The advent of robotics, 3D printing and the like, he suggests, have moved the west from manufacturing to “brainfacturing”.
As this plays out, investors are rediscovering political risk (and singling out state-owned companies for punishment), and drastically reappraising their projections for the emerging market future.
Has he given up on his positive thesis for the emerging markets? Certainly not. As he points out, long-term potential is always ignored when markets come down (just as problems are ignored when prices are rising).
It is still the emerging, and not the American, consumer who will steadily become king. Already, he points out, more cars, washing machines, televisions and mobile phones are sold in the Bric countries (Brazil, Russia, India and China) than in either the EU or the US.
He also contends that slower emerging growth is not a problem – for China, it is an advantage – and he denies that the inevitable unwinding of quantitative easing in the US need cause anything like the panic that briefly gripped emerging bond and currency markets last year.
But the enthusiasm with which he charts the growth of a US “Brain Belt” to supplant its old “Rust Belt” is reminiscent of the excitement with which he once charted the rise of emerging multinationals. Innovation centres are sprouting up across the US, he points out, in places like Minneapolis, Akron or Boulder, as well as around prestigious universities. He charts more than 200 examples of “re-shoring” as companies like GE return to the US, while Apple makes Macs in the US for the first time.
For the next decade he expects growing confidence in the US (like post-1970s Japan), more innovation in manufacturing, and an epic “battle for the billions of emerging consumers”. He still expects emerging markets to grow faster.
The notion of a Brain Belt might yet be as catchy as the notion of “emerging markets”. Is that a good thing?
Van Agtmael’s “emerging markets” certainly aided his aim of opening up new markets to equity finance. It also had some negative consequences, such as a succession of attempts to impose brands on new markets with increasingly absurd results. Think of acronyms, from Brics to Civets, Mints and Biits.
This is part of a broader trend to oversimplification. People lazily assumed that all “emerging” markets would indeed emerge, that they would outperform the existing developed markets, and that they would grow in a straight line.
None of these ideas is necessarily true. There is no cause to abandon carefully chosen positions in EM (or to invest mindlessly in the “Brain Belt”). But, three decades after “emerging markets” arrived on the scene, all investors should follow Van Agtmael in accepting that the game is changing.
曾多年担任国际金融公司(IFC)官员的安东尼?范阿格塔米尔(Antoine van Agtmael)，于1982年发明了“新兴市场”这个词。他当时想推动对发展中世界进行股权投资，结束对债务的危险依赖。
不过，该如何称呼这一地区呢？当时，一场债务危机正在“欠发达国家”(lesser developed countries)肆虐。LDC这个首字缩写几乎跟如今的EM（新兴市场）一样频繁使用，但这个标签不可能用。同时，没有人会踊跃买入一只“第三世界基金”。
亚洲已经在抱怨来自美国的竞争。之前搬迁到中国的制造企业开始迁回墨西哥，甚至迁至美国本身。他指出，在优先任务是提高实际工资（这么做会削弱竞争力）的中国，2008年危机之后的沾沾自喜不见了，取而代之的是不安。安永(Ernst & Young)数据显示，自2001年以来中国的薪资水平上升了400%，而美国的单位劳动力成本自1995年以来下降了12%。