Shift in economic power from west to east- Subhashree

Description:

The 21st century could very well turn in to the century where the US loses its status as the ultimate economic superpower of the world, such is the size of the economic powerhouse being built in and around China. Driven by strong growth in emerging countries, an economic power shift from west to east is taking place. This shift has been going on for a while and will reach a new high point around 2010’s. The transition into manufacturing became a key piece of Asia’s development in a context of export-led growth, where Asian companies saw the whole world as their market. The average growth rate of the developed markets is between 0.1-0.2 percentage points per annum for the period to 2050. For developing countries the growth rate is on average more than 3-4% per annum. China’s astonishingly rapid rise to great-power status, both militarily and economically. In the economic realm, the International Monetary Fund forecasts that China’s share of world GDP (15 percent) will draw nearly even with the U.S. share (18 percent) by 2014. Until the late 1960s, the United States was the world’s dominant manufacturing power. Today, it has become essentially a rentier economy.

Enablers:

The key enablers especially are: affordable labour and access to manpower. To add on it, availability of youth is high since the east is growing and west has more aging population Capitalism and getting most profits for the industries have made them shift manufacturing toward emerging markets in east.

Inhibitors:

The feedback of this effect has been the rise in nationalism in west especially in US and UK. This is because the rise of east as led to shutting of industries and people’s livelihood especially the unskilled labour.

Paradigm:

Globalization and rise of internet accelerated the world trace and economy. It also made the world more connected and accessible which fueled the manufacturing sector to become more global or gave remote access.

Timing:

1990's onwards

Web Resources:

https://issafrica.org/chapter-2-megatrend-one-the-global-shift-of-power-from-west-to-east https://www.pwc.nl/en/topics/megatrends/economy.html https://www.managementstudyguide.com/paradigm-shift-in-global-economy.html https://nationalinterest.org/article/the-global-power-shift-west-east-6796