Which country will be the dominant economy during the rest of the century?

For a significant part of the 20th Century, the United States has enjoyed a distinct position of

economic dominance globally. Even now, it is by far one of the most successful and progressive

free market economies. It has a considerably higher per capita income compared to other major

countries. However, over the last few decades, the global economic balance has been shifting

quickly (Kupchan, 2012; Langran & Schnitzer, 2007 ). Economists observe that the Global

Financial Crisis 2008/2007 has accelerated this trend. China has however been relatively spared

from the worst effects of the global financial crisis that hard hit its East Asian neighbors

(Krugman, 2000). Since the late 1970s, China entered and has remained on an impressive

economic growth path and has shown the possibilities of overtaking the US as the world’s

dominant economic power in a generation, and India, Brazil and Mexico are expected to emerge

as major economic powerhouses by the mid of this century.

As of now, major indicators show that China’s economic power will surpass the United States’

sooner than most people think. In terms of volume of domestic and international trade, financial

stability, and wealth, China has already emerged as a leading economy in the world (Kupchan,

2012 ). Subramanian (2011) argues that Chinese share of the global economic power will be as

big as America’s during 1970s and Great Britain’s about a century ago. Three major forces

including demography, convergence and geopolitics will dictate China’s emergence as a

dominant economy during the rest of the century. China’s population is almost four times bigger

than America’s population. This means that China only has to generate 25% of America’s output

per person to surpass US total output.

Locally, the Chinese consumption of all forms has increased in leaps and bounds. The increasing

presence of the Chinese business community and multinationals especially in the developing

countries that have joined the path of substantial economic growth also shows that the China is

likely to be the dominant economy during the rest of the century.

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