Maybe you haven’t noticed it, but we are in the middle of a historic change in global economic power. That’s the funny thing about world’s changing events, you never notice them until they’re over. This power transfer is from West to East, from the US and Europe to emerging market giants: Brazil, Russia, India and China (collectively known as the BRIC countries). The BRICs are getting rapidly richer, while we are accumulating the debts. Where will it end?
The figures are amazing, especially when you look at China. Its population is 1.35 billion, more than 20 times the UK’s, with a workforce of an astonishing 812 million people. It’s the world’s second-largest economy and the biggest exporter on the planet. It is also the world’s largest creditor nation. According to some estimates, by 2025 China will have substituted the US as the global economic superpower. By 2034, India will have knocked the US into third place. The BRICs are younger and hungrier than us, and catching up fast. But you have to put their success into perspective. As the BRICs grow richer, they are likely to encounter many of the problems we have. China’s population is getting old rapidly, due to its one-child policy, just as in the West. Russia’s population is actually decreasing due to high alcohol and tobacco abuse and low birth rates. The BRIC countries can’t continue to grow at the same pace year after year. Plenty of things could go wrong. Their economies could overheat. Political corruption, growing inequality of wealth, inflation or poor infrastructure could block their revival.