You know the storyline by now. There are one million US-dollar millionaires in China. (“To get rich is glorious,” said former leader Deng Xiao-ping.) China’s total trade — the sum of imports and exports — is now bigger than that of the United States. “They’re going to eat our lunch,” whimper the fainthearted in the West.
It’s not just the Chinese who are coming. The Indians and the Brazilians are coming too, with economic growth rates far higher than in the old industrialized countries but it doesn’t even stop there. There’s also Mexico, Turkey, Indonesia and half a dozen other big countries in what used to be called the Third World that have discovered the secret of high-speed growth.
As recently as 2009, the “Brics” (Brazil, Russia, India and China) accounted for less than one-tenth of total global consumption. The European Union consumed twice as much and so did the United States. But by 2020, the Brics will be producing and consuming just as much as either of the older economic zones and by 2025 considerably more than either of them.
In fact, if you include not just the four Brics but all the other fast-growing economies of the ex-Third World, in just a dozen years’ time they will account for around 40 per cent of world consumption. As a rule, with wealth comes power, so increasingly they will be calling the tune that the West must dance to. Or at least that is the Doomsday scenario that haunts the strategists and economists of the West. It’s nonsense, for at least three reasons.
First of all, a shift in the world’s centre of economic gravity does not necessarily spell doom for those whose relative influence has dwindled. The last time the centre shifted, when the United States overtook the nations of Europe in the late 19th and early 20th centuries, it did not dent Europe’s prosperity at all.
Secondly, the new centre of gravity this time, while mostly located in Asia, is not a single country with a coherent foreign policy like the United States. The four Brics will never become a strategic or economic bloc. They are more likely to split into rival blocs, although one hopes not. And the Mexicos and Turkeys and Indonesias of this new world will have their own fish to fry.
Thirdly, descriptions of the future that are simply extrapolations of the present, like the ones at the start of this article, are almost always wrong. If the widely believed forecasts of the 1980s had been right, Japan would now bestride the world like an economic Colossus. The one certain thing about the future is surprises — but some surprises are a little less surprising than others.
Take climate change for example. The scientific evidence strongly suggests the tropical and sub-tropical parts of the world, home to almost all of the emerging economic powers, will be much harder hit by global warming than the temperate parts of the globe, farther away from the equator, where the older industrialized countries all live.
The centre of gravity of the world economy is undoubtedly leaving the old “Atlantic” world of Europe and North America and moving toward Asia but how far and how fast this process goes remains to be seen.
And there is no reason to believe that it will leave the countries of the West poor or helpless.
Gwynne Dyer is an independent journalist whose articles are published in 45 countries.