The five countries quietly winning the new global economy

The headlines tell a simple story: a trade war between China and the United States, collapsing supply chains, and the end of globalization as we know it. Yet this familiar narrative misses a quieter truth: while superpowers fight, smaller countries are quietly having their best decade in generations.

Take Uruguay. When China and Australia got into a diplomatic spat in 2020, Chinese beef imports from Australia plummeted from nearly 50% of the market to under 10%¹. Someone had to fill that gap. Uruguay's beef exports to China exploded by 1,226%. Argentina's jumped 587%. Brazil's soared 892%. These aren't rounding errors—these are economy-transforming windfalls.

And it's happening again. As US-China soybean trade collapses under new tariffs, Brazil and Argentina are positioned to capture billions in new export revenue. The pattern is clear: when giants clash, nimble countries with diversified trade relationships win big.

The Reshoring Revolution Nobody Talks About

The conventional wisdom says companies are "bringing jobs home" from China. The data tells a different story. Yes, investment is leaving China—but it's not going to Ohio or Birmingham. It's going to Vietnam, Malaysia, Mexico, Poland, and India.

Why? China's labor costs have risen over 300% since 2000², pricing it out of low-cost manufacturing. Meanwhile, countries like Malaysia and India have seen unit labor costs actually decrease. When you add in geopolitical risk—companies worried about getting caught in the crossfire—the result is "China plus one": businesses diversifying production to friendly, nearby, or politically neutral countries.

Malaysia now handles 13% of global semiconductor packaging. Mexico has become the top exporter to the US. Vietnam's manufacturing exports have exploded. This isn't deglobalization—it's re-globalization, and emerging markets are the big winners.

From Basket Cases to Safe Havens

If you'd told an economist in 2000 that emerging markets would handle a global pandemic, a major war, and the fastest Fed interest rate hikes in history without a single major debt crisis, they'd have laughed you out of the room. These were the countries that collapsed every decade like clockwork—Latin America in the '80s, Asia in the '90s, Russia in '98.

But something changed. Today's emerging markets hold enough foreign reserves to cover 9.6 months³ of imports—nearly triple what they had in the 1980s. They've shifted to borrowing in their own currencies, not dollars, so currency drops don't trigger debt death spirals. They've adopted inflation targets and independent central banks. They've learned from their mistakes.

The result? During the COVID-19 capital flight and the Ukraine war shock, emerging markets didn't experience the economic collapses or banking crises that defined previous generations. In fact, their fiscal management outperformed advanced economies.

Why This Matters Now

We're entering an era of persistent geopolitical tension and economic fragmentation. The old world of stable, US-led globalization is over. In its place: a multipolar system where countries pick and choose trading partners based on politics, geography, and opportunity.

Emerging markets positioned themselves perfectly for this moment. They've diversified their trade relationships, making them less dependent on any single partner. They've built financial buffers. They've created flexible, resilient economies that can pivot when opportunities arise.

So while headlines focus on trade war losses, the real story is unfolding quietly in Kuala Lumpur, São Paulo, and Warsaw. These are the countries turning global chaos into unprecedented opportunity.

The world is fragmenting. But for the right countries, that fragmentation is creating the opportunity of a lifetime.

Adapted from: Franklin Templeton. (2025, June 11). Can emerging markets navigate a fragmented world?

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