the regional composition of trade flows have occurred. while the industrial countries ’ real share in world exports has gone down from 70 % to 60 %, that of developing countries has gained ground. the fast - growing economies in east asia, in particular, have been extremely successful in integrating into the world economy. their market share of world exports went up from 6 % in the 1970s to about onefifth in 2003. by no later than 2010, east asia, including japan, might account for more than one - third of world trade and thus become the world ’ s most important trading area, ahead of the european union. the export - oriented development strategy of the asian economies - in contrast to the more inward - looking approach in latin america - has brought a considerable measure of success. it has stimulated not only cross - border trade but also economic growth. developing asian economies currently account for nearly one - quarter of global production. they have exploited their capacity for fast growth by • efficiently mobilising their physical and human resources • adapting foreign technology and • utilising the opportunities for specialisation resulting from their integration into the world economy. as a consequence, they have roughly doubled their economic weight over the past 30 years. real convergence - as suggested by growth theory - seems to work if the right conditions are in place. at the same time, advanced economies, most notably west and east european countries, have lost significant market shares in world production. slow population growth, modest gains in productivity and the breakdown of the former communist planned economies have hampered their economic performance. at present, advanced economies, while representing no more than about one - sixth of world population, account for 55 % of global gross domestic product ( gdp ) based on purchasing power parity ( ppp ) valuation - about 5 percentage points less than in 1980. the transition countries ’ share of global gdp has gone down from 12½ % to 6½ %, although there has been a small increase recently. for the sake of completeness, let me say that the united states ’ share of global gdp has not changed much over this period. however, in recent years china has been the most outstanding example in terms of economic performance. over the past ten years the chinese economy has grown on average by more than 8 % annually in real terms - faster than other asian countries and very much more than the advanced economies ( 2½ % ). admittedly, china is still a relatively poor country, but the pace at which it is catching up is remarkable

come into operation. finally, there might be some hope in the passing of the phenomenon of “ perceived ” inflation. admittedly, not a great deal of momentum can be expected from all of the cited factors. the underlying pace of economic growth will remain subdued in the first half of next year. when exports gain momentum and the negative confidence effects on investment and consumption peter out, the upturn from the second half of 2003 onwards will be somewhat stronger and more broadly based. however, given the high degree of uncertainty and unused capacity, we expect no improvement in investment activity in the near future. we believe that investment activity will not take a turn for the better until the second half of next year. experience of investment behaviour in the past may be a further indication that the pick - up of investment in machinery and equipment will be modest. as regards investment in construction, leading indicators show that the downward adjustment process has not come to an end and is likely to continue in the near future. as i said at the very beginning, the outlook for inflation is much better than the outlook for growth. but before i turn to the price - side of the german economy, i would like to conclude my remarks on the real side of the economy with a few sentences on germany ’ s export performance. real world market shares of germany recently, there have been repeated references to a sharp decline in german world market shares since the beginning of the 1990s, and this has been regarded as indicating germany ’ s lack of competitiveness. indeed, the development of world market shares may be misleading – if conventionally calculated on the basis of nominal foreign trade values in national currencies, which have been converted by current exchange rates into us dollars - whenever there are significant exchange rate movements of the dollar. thus, a depreciation of the euro against the us dollar, if considered in isolation, necessarily results in a fall in germany's world market shares, even if its real market shares actually remain constant. to avoid these distortions it seems reasonable to calculate real world market shares, which are by definition adjusted for changes in inflation differentials and exchange rates. in contrast to the nominal world market shares, germany ’ s real shares have shown a significant increase since the mid - 1990s. germany ’ s share of global exports rose from 9 % in 1995 to 10 % at the end of 2001 and thereby regained the position held in the early 1990s. this upturn reflects, in particular, the improved price competitiveness of germany ’ s industry