Global Economic Power Shifts to Asia

Infographic: Continental Shift: The World’s Biggest Economies Over Time | Statista

Source: World Bank “PPP GDP is gross domestic product converted to international dollars using purchasing power parity rates. An international dollar has the same purchasing power over GDP as the U.S. dollar has in the United States. GDP is the sum of gross value added by all resident producers in the country plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources. Data are in constant 2017 international dollars”.

The chart above shows the continuing shift in economic power of the developed versus developing countries between 1992 and projected through until 2024. The rise of China can be clearly viewed in the chart, and although it doesn’t show until 2024, China has already replaced the U.S. as the largest economy in the world. As of 2019. India overtook Japan, Russia, Germany, and the UK to move into third place. This is not just a story of two large heavily populated countries taking their place amongst the largest economies in the world but a power shift as heavily industrialized G-7 economies have steadily been displaced by developing Asian economies, including Indonesia. What is not shown in the chart, is that eight more countries are rapidly expanding their economic clout. These include South Korea, Thailand, Vietnam and Pakistan. There will likely be twelve Asian countries in the top twenty-five economies of the world by 2024.

The rising GDP of these countries will change both economic and political dynamics in the world. We already see countries struggling to deal with issues of technology, access to key components and control of data. The increasing role of an Asian middle class will impact consumption patterns. In this continued evolution, North America and Europe will lose some of their historic advantages, which makes it increasingly important for the developed world to support globalization and to build strong, balanced trade relationships.