Global Economy

[acharya]

<b> The End of 'Chimerica'</b>
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->And so I came away from Chongqing thinking differently about China. In particular, I came away convinced that we are living through the end of something Moritz Schularick and I christened “Chimerica”. In our view, the most important thing to understand about the world economy over the past 10 years has been the relationship between China and America. If you think of it as one economy called Chimerica that relationship accounts for around 13 per cent of the world’s land surface, a quarter of its population, about a third of its gross domestic product and somewhere over half of economic growth in the past six years. <!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->What are the geopolitical implications of all this? One is that the great reconvergence between East and West is speeding up. If you go back to the very first “BRICs” – Brazil, Russia, India, China – report that Jim O'Neill and his colleagues at Goldman Sachs produced in 2003, China was projected to overtake the United States in terms of gross domestic product in 2040. But in more recent reports, that has been brought forward to 2027. And maybe that makes sense. <!--QuoteEnd--><!--QuoteEEnd-->

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->A third geopolitical consequence of the crisis we are living through is that troublemakers get richer. The effect on gross domestic product of an increase in the price of oil from $50 to $100 a barrel was a 16 per cent gain for Russia, a 24 per cent gain for Iran and a 33 per cent gain for Venezuela. High energy prices would not matter if there were more Norways or Canadas among the energy exporters, or if significant new sources of energy could be found in the United States itself. But this is not going to happen any time soon, even if restrictions on exploration and drilling in the US are lifted. The biggest increases in oil production in recent years have been in countries like Azerbaijan and Angola..<!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The great geopolitical and economic shift from West to East that we are living through is no recent phenomenon. It began over a century ago, when Japan mounted the first effective Asian challenge to rampant European imperialism. Among other things, this great shift implies that a larger and larger proportion of global industrial production is being located in a more dangerous part of the world than previously. Even if there is no such thing as global warming – even if the climate change story is a complete fantasy – there is still a problem, simply because Asia is already much more vulnerable to natural disasters than the West. (Consider the death toll attributable to natural disasters in 2007: 47 dead in North America, 13,748 dead in Asia.) If the East becomes the workshop of the world, that workshop will suffer more typhoons, more earthquakes and more floods than when it was located in and around Dusseldorf or Detroit.
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<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Back in 2006 Chinese state television broadcast a 12-part documentary entitled The Rise of the Great Powers which charted the experience of nine empires, beginning with the Portuguese empire and including the United States. The remarkable thing about this series was that it was not a series of polemics against Western imperialism. On the contrary, an official statement that accompanied that broadcast declared: “China should study the experiences of empires it once condemned as aggressors bent on exploitation.” And the lessons were fascinating: the crucial importance of maritime power, the vital need for political unity.<!--QuoteEnd--><!--QuoteEEnd-->
http://standpointmag.com/the-end-of-chimer...2C0%2C0%2C0%2C0