Importance of Fiscal and Monetary Policy in UK's Economic Growth

GLOBAL BUSINESS
ENVIRONMENT
PORTFOLIO

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION ...............................................................................................................................2

INTRODUCTION
Emerging economies are markets which are moving in direction of becoming developed
markets and are more engage with world market as it is growing. Nations categorised as
emerging economies have characteristics of developed market and its progress it becomes
integrated global economy (Destek and Aslan, 2017). It is important because it has impact on
global trade as they are are growing market with several opportunities. As they grow faster than
developed countries thus investing in such market is beneficial for trade and global economies.
China was known as emerging economy few decades ago with GDP of £305.35 billion in 1980
and recent GDP of China is £13.41 trillion. This shows that emerging markets are tend to
become strongest economy in world (Emerging markets: Statistical Profile, 2019).
MAIN BODY
There has been successful inflow of Foreign Direct Investment (FDI) in China as it has
received 20% of all investment in last 10 years. FDI has played one of the important role in
economic development and export. With the helps of technology China is earning 22% profits
with just 10% labour which indicates higher productivity. Different policies of FDI like
liberalisation has helped China to grow its GDP with the help of many multinational corporations
are are investing in the country (Foreign Direct Investment – the China story. 2020).
There are some countries which are appropriate for FDI and provide better returns like
Singapore is a country which lacks in natural resources and thus one of best region for business.
It is one of the important financial centres in the world for Asian countries and thus have
developed as gateway for favourable region for FDI. Another country is Ireland which offers
positive tax system for multinational investment and other resources. Low cost labour force
which are educated, fluent in English. It also provide supportive environment for innovation and
funding as well. Thus this makes Ireland favourable for FDI with higher returns for multinational
companies (Top Countries For Foreign Direct Investment, 2020).
The two major companies that have tremendous growth in China is General Motors (GM)
and Coca Cola which entered in market and their share is growing till now. GM entered into
China's market in 1995 and had joint venture with company. China became world's biggest
vehicle market and gave growth to auto-mobile sector and GM (The Secret to GM’s Success in
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China: “We Listened”, 2019). Another multinational company is Coca Cola which entered
China's market in 1979 and since then has established 45 manufacturing units with more than
51,000 employees. Country has become third largest market for company and market size is
£83.7 billion in 2017 and company will introduce new 60 products (Coca-Cola embarks on
'healthy' growth route, 2018).
CONCLUSION
Emerging economies is the market which has potential for growth and development and
able to provide return on investment. Such markets are importation for global trade and market
as it provide several opportunities for multinational companies to invest and have growth in
international market. Foreign Direct Investment provides growth in GDP which leads to future
development of country.
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