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Asia and the world economy: “Walking on two legs (of different lengths)”

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Author(s): Max Spoor

Journal: Revista CIDOB d'Afers Internacionals
ISSN 1133-6595

Issue: 89-90;
Start page: 45;
Date: 2010;
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Keywords: International economy | development | crisis | trade | Asia | China

ABSTRACT
The global imbalance that currently exists between high-income countries and medium- and low-income countries is being positively compensated for by the rapid growth of the economies of South-East Asia, as well as those of East and South Asia. In fact, viewed as a whole, the economies of China and India possess a sufficient potential to surpass the USA’s economy in just a few decades, while in 2010 China has already become the second-largest economy in the world. Its enormous dynamism has been made clear, furthermore, by the speed and relative success with which these economies have succeeded in weathering and emerging from the recent global financial crisis of 2008-2009 which, however, has strongly impacted on the economies of the countries of the Organisation for Economic Cooperation and Development (OECD). In the first part of this article, the author analyses the scope of this emergency for Asia’s economies and, especially, for the world economy as a whole, the centre of gravity of which has become increasingly displaced towards this region. In the second part, the author tackles the issue of trade as a motor of such development and, as a consequence of same, the strategic competition for raw materials, in which China and India are playing an increasing role. Finally, the author notes the existence of imbalances generated by sustaining this model, such as the ones that affect trade balances, current accounts and exchange rates which, if they are not corrected, will have negative effects on developing countries, once again.
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