The Asian Economic Pace of Change

The term BRICS (Brazil, Russia, India and China) came from Jim O’Neil at Goldman Sachs Asset Management. He was of course referring to the economic strength of these new growth markets in these emerging nations. It is these countries and new markets that are beginning to dominate the global economy.

Some very simple statistics explain this.

In 1980 the United States of America accounted for 25% of the world’s GNP (Gross National Product). China in 1980 only accounted for 2.2% of the world’s GNP.
(yes, China was less that 10% of the US economy in 1980).

Now, projections for 2017 (just over 3 years from now), in 2017 the United States of America will account for 17.6% of the world’s GNP (Gross National Product) and China will account for 18% of the world’s GNP.
(Yes, China will overtake the USA).

Another statistic is the consumer base.

Today Europe accounts for 7% of the global population, it is 25% of the global gross national product, and more worrying, accounts for 50% of social spending. This is totally unsustainable. (An Angela Merkel quote)
Today in Asia the middle class, thus consumers with disposable income, account for about 500 million. This number could be as high as 1,750 million (1.75 Billion) by the year 2025.

We are perhaps seeing a shift in global economic dominance, within the next 5 years.

Final point, the largest economies from 1 AD to 1800 AD were India and China. It was the industrial revolution in the 1800’s, the advancement in maths, technology, science and automation from Europe, that made the US and Europe dominate the global economy for the past 200 years.

Perhaps we are seeing history all over again, with wealth and dominance moving back to Asia who dominated the global economy for the first 1800 years. One hopes that global wealth is spread across right across the globe, otherwise we will see a decline in living standards in Europe and North America.

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