Bloomberg Businessweek - USA (2020-11-16)

1951 2020 2050

1 00%

50

0

GDPsharesandforecasts,bycontinent

NorthAmerica Europe Asia

SouthAmerica Other

1951 2020 2050

1 00%

50

0

GDPsharesandforecasts,

byclassificationofeconomy*

Advancedeconomies Emergingmarkets

59

BloombergBusinessweek November16, 2020

A lotcouldhappentothrowourprojections

offtrack.Wars,naturaldisasters,financialcri-

ses,and—astheCovid-19crisisdemonstrates—

pandemicscould allreconfigurethe global

economic map.Still, absent a crystal ball,

forecastsofpotentialgrowthprovidethemost

reliablebasisforthinkingaboutthelongterm.

ASIA’SCENTURY

Asiaisreturningtoitspositionasthecenter

oftheglobaleconomy.Attheturnofthecen-

tury,withChinayetto jointheWorld Trade

OrganizationandIndia’spotentialstillburied

beneaththebureaucracyoftheLicenceRaj,

Asiaaccountedfor25%ofglobaloutput,sub-

stantiallylessthanNorthAmericaandEurope.

By 2050 thecontinent,whichalreadyaccounts

formorethan50%ofglobalpopulation,will

alsocommandmorethanhalfofglobaloutput.

NorthAmericaandEuropewillbeinretreat.

SubstantiallydrivenbytheriseofChinaand

India,the emerging-marketshareofglobal

GDPisalsosettoaccelerate.In 2000 emerg-

ingmarketsproduced21%ofglobaloutput,

withadvancedeconomiesgeneratingthebulk

ofthe rest. In 2042 emerging markets will

overtakeadvancedeconomiesasthebiggest

contributorstoglobalGDP.By 2050 theywill

accountforcloseto60%ofthetotal.

Moreviscerallyfeltwillbetheshiftinrel-

ative power between countries. In 2033,

accordingtoourprojections,Indiawillover-

take an age-hobbled Japan to become the

world’sthird-biggesteconomy.In2035,China

willoutstriptheU.S.tobecomethebiggest.

By2050,Indonesiamayhavemovedintothe

bigleague.Threeoftheworld’sbiggestecon-

omiescouldbeAsianemergingmarkets.

CHINAASCHALLENGER,

THENCHALLENGED

The idea that these transitions will occur

smoothlyappearsfanciful.Theinevitability

ofwar between rising andruling powers—

the“ThucydidesTrap,”asHarvard political

scientistGrahamAllisonputsit—isa subject

ofcontentionamonginternational-relations

scholars. Still,the logic is compelling,and

you don’t need to believe inthe certainty

of conflict to agree that a shift in the bal-

ancebetweengreatpowerswillbea process

fraughtwithrisksanddifficulties.

The looming transition from the U.S. to

Chinahasalreadyheightenedtensions.A fight

thatstartedovertradehasspilledovertotech-

nology,humanrights,andterritorialclaims.

TheTrumpadministrationmighthavemarked

a lowebbindiplomaticdueprocess,exacer-

batingtensions,buttheunderlyingdynamic

asChina’srelativestrengthwaxesandthatof

theU.S.wanesisn’tgoingtochange.

U.S.-China tensions aren’t the only geo-

political risk on thehorizon. By the2040s

thecombinationof anagingworkforceand

developmentfatigue is set to drag China’s

annualGDPgrowthdowntoward3%.India,

withitsyoungpopulationand

significantroomtocatchup,

will probably still be clock-

ing a more rapid pace. The

scopefor tensions between

the world’s most populous

single-partyand democratic

states—whose militaries in

2020 engaged in a bloody

borderskirmish—is already

THE NEW ECONOMY

*FIGURES BASED ON CURRENT CLASSIFICATIONS. DATA: BLOOMBERG ECONOMICS