Dr' Gene Huang, PhD

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Global economic growth in the context of Access
Gene Huang, Ph.D. Chief Economist, FedEx
The Economic Club of Memphis December 14, 2006
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The Concept of Access
Access has risen dramatically
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The Concept of Access
Time and Space collapse, Information explodes
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The Concept of Access
Impact of Access China, India, other emerging
markets and an enlarged pie
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The Concept of Access
Perpetual cycle of Access generation expansion
are driving explosive growth in recent years
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The Concept of Access
Access is changing whats possible
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Some statistics about China related to Access 99
Chinese cities with populations gt 1 mil as a
result of urbanization. 4,000 skyscrapers (18
stories) in Shanghai alone, with 1,000 more
planned. A car market that tripled from
2000-05 to 20 million cars, with 10-20 annual
growth forecast. A 23,000-mile national highway
system that will grow to 55,000 by 2020. 37 new
international airports, with 48 additional
airports planned. 111 million internet users,
half with broadband service, growing to 232
million in 2010. 416 million mobile phone
subscribers at present.
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Macro Drivers
Growth of hi-tech and higher value-added goods
Smaller, lighter, easier to be transported Shorten
ed replacement cycles
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Macro Drivers
Globalization

• Via goods, assets, and now labor channels
• Trade deepening
• Global financial integration
• Migration and outsourcing

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Macro Drivers
Global value chain global portfolio perspective
Distance is an elastic concept Manufacturing
process has become highly fragmented The essence
of commerce is exchange
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Macro Drivers
Internet transforming global selling and sourcing
E-Commerce Increased velocity of transactions
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Macro Drivers
Supply chain efficiency
Steady decline in I/S ratio Structural
improvement in productivity growth One global
chain
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Macro Drivers
Supply chain reliability and integrity have
become macro economic issues
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Trends
Global economic trends
Global GDP shows slightly above trend
growth Leading indicators such as PMIs and LEIs
continue to show growth Globally, demand and
output divide suggests inventory adjustment to
complete soon Regional rotation is taking place
good for global balancing Portfolio strategists
remain upbeat and growth-biased
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Trends
Global economic trends
The big coming out party (BRICs) will continue
for many years as both industrialization and
urbanization processes deepen Economic growth
ladder dictates commodity demand and
opportunities for energy efficient/environmentally
friendly products/services Infrastructure
development and understanding of role-play in
global supply chain are key to success
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Trends
Continued mid-cycle environment in the U.S.
Increasing costs (materials, capital, and labor)
and structural inflation Strong corporate balance
sheets Steady growth in the labor market and
income Sector rotation still exhibits a slight
growth bias toward the industrials and the
durable goods sector Increasing competition and
MAs Mid-cycle inventory adjustments are expected
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Trends
Challenges
Does the current balance of payments accounting
framework need to be revamped? Does the concept
of core inflation rates need to be
revisited? How do we measure growth potential in
a global context? And inflation?
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From collective perception to collective behavior
keep the animal spirits alive