In recent years, we’ve been witnessing an eastwards shift in the global arc of power and influence.
Perhaps this ongoing trend is nowhere more perfectly evidenced than in the decision by Michael Bloomberg, the American billionaire and former New York Mayor, to set up a Beijing-based rival to the Davos-based World Economic Annual Forum.
The New Economy Forum, being launched by Bloomberg along with former US secretary of state Henry Kissinger and former US Treasury secretary Hank Paulson, is aimed at addressing what I believe is potentially a new world order, in which the rise and influence of China challenges that of the United States.
The first meeting is taking place in November and is “focused on the world and China as an emerging power and how we all work together,” according to Bloomberg.
For over a century, the United States has been the world’s largest economy – making up over 24% of the world’s gross domestic product, according to World Bank data.
However, over the past five to 10 years, the influence of China’s economy has flourished, and as per a report by the Centre for Economics and Business Research in London, China will overtake the US economy by 2032 to claim the top spot.
In addition, it’s my view that this monumental shift taking place between these powerhouse economies has also been heightened since Donald Trump became the 45th president of the United States.
Trump has been openly opposed to globalization, emphasizing his protectionist views and policies, even threatening to start an all-out trade war by imposing tariffs on as much as $60 billion of Chinese goods.
Trump has been openly opposed to globalization, emphasizing his protectionist views and policies, even threatening to start an all-out trade war by imposing tariffs on as much as $60 billion of Chinese goods
Moreover, the United States’ absence from International Monetary Fund and World Bank meetings in Washington last year was palpable. Being the major stakeholder of both these key international bodies, like many observers, I regarded America’s non-attendance as a conspicuous void.
This void was filled by China, firmly focused on economic and international co-operation. At the time, Vice Minister of the Ministry of Finance Shi Yaobin sent out a clear message of his country’s more open approach: “No one country alone can solve all the problems we are facing now. So we have to strengthen our international co-operation. This is the only way out to solve the problems we are facing.”
Chinese President Xi Jinping reiterated this last month, as he pledged to open the nation’s economy further, and garnered support for globalization to place himself at the forefront of promoting international cooperation and free trade.
Xi told the Boao Forum for Asia that China’s doors would only open “wider and wider” to foreign investment.
He went on to say that previous promises of eradicating foreign equity stake caps in banks, securities firms and insurance would be undertaken before the end of the year.
“We will never threaten anyone, nor overthrow the existing international system no matter how rich or powerful China becomes. We will not seek to build up spheres of influence – China will always be a builder for world peace, a contributor to global development and a defender of international order.”
Furthermore, referring back to the Centre for Economics and Business Research report, by 2032, three of the four largest economies will be Asian – China, India and Japan – and South Korea and Indonesia will also make the top 10.
As such, as this shift in the global economies becomes more pronounced over the next decade, I believe we may see an unprecedented move away from U.S. economic supremacy as the Asian giants dominate the world economic league table.
And, naturally, with this economic power comes greater overall global influence. So if Davos is a major evidence of this shift eastwards, I wonder what we’ll witness next to potentially confirm this fundamental change?