FORTUNE — There’s no debating this: Buzzy emerging markets have lost some of their zip. The question for both American government and business is why — and what to do about it.
The explanations unsurprisingly are manifold. In a panel discussion at Fortune’s Most Powerful Women’s summit (subtitled “The Hype is Over — Now What?”), JPMorgan (JPM) managing director Jing Ulrich ticked them off: structural problems like crushing debt loads that are devaluing currency, a trickle-down effect from China’s lagging growth, and, from the developed world, the threat of the stimulus spigot finally wrenching off. The evidence of the impact is clear in the numbers. “The golden era of double-digit growth in China is behind us,” and could fall as low as 5% in the next five years, Ulrich said, while India faces a halved rate of 4% and Brazil and Russia will plod forward at 2%.
One response simply takes the long view. “If you’re playing in emerging markets, you need to be a medium- to long-term player,” Arison Investments CEO Efrat Peled said. “The indicators are slowing down, but it’s all relative to what’s happening in the rest of the world.” But Anne-Marie Slaughter, a top advisor to then-Secretary of State Hillary Clinton now serving as president of the New America Foundation, warned companies need to be mindful that sudden political conflagrations can “take over from the economic rationality.” Her worst night at the State Department came when the Japanese coast guard captured a Chinese fishing vessel — the sort of random event packed with potential for an escalating series of reprisals that would require a U.S. military response.
Along those lines, Ulrich sounded a hopeful note that the new Chinese leadership team will embark this fall on market reforms designed to ease foreign investment — while Slaughter was less sanguine. “Another way to look at this is you’ve got a new government in place with a lot of rising social demands, a lot of dissatisfaction with things like the food safety, drug safety, and the environment, and it is easier to point the finger at a multinational company than a local company,” Slaughter said. “I see a huge pressure to scapegoat foreign companies over domestic companies, and I think that will be hard to resist.”
Meanwhile, as we look to compete with the Chinese in the developing world, we should borrow a page from their book, Slaughter said. Paraphrasing an insight she heard from an African official, she said, “When Americans see a picture of African kids without shoes, they think, ‘How do we organize a charity drive?’ When Chinese see pictures of Africans without shoes, they immediately think, What’s the income level and how can we price the shoes to sell?’ The point is an important one for business: Africans prefer to be treated as a market than a charity.”