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Where the Global Economic Center of Gravity is Moving and Why?

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Researchers at the London School of Economics calculated the economic center of gravity of the world by using Gross National Product (GDP) as a measure of the mass or weight of a country and using the world map as a physical object.

Based on the calculations, the center of gravity in 1950 was in the Atlantic Ocean. Today the center of gravity is over southern Russia and moving eastward, as shown in the map below.

Shortly after the industrial revolution of the 19th century, Europe and North America begun dominating the overall global economic activity and shifted the global GDP center of gravity westward consistently since 1850. By 1950, Europe and the United States combined GDP accounted for more than 50 per cent of the world’s production, and China and India combined GDP had fallen to less than 8 percent of world’s GDP. Japan was about to take over the economic lead in Asia.

A Major economic transformation started during the 1980’s. Population growth had declined in Europe and North America but increased significantly in China, India and other Pacific Rim emerging markets. China and India saw their GDP levels grow at very high rates, pushing them closer and closer to the advanced economies. Today, China is the second-largest world economy and together with India they already account for 20 percent of the world’s GDP. Most economists believe that by the year 2025 China will surpass the United States and will become the largest world economy.

As the graph shows, China will soon regain the economic dominance it had 700 years ago at the expense of the economic powers of the developed countries, and will once again lead the world in industrial revolution, new technology development, medical advancements and military strength.

The western economies have good reasons to fear Asia and China in particular. China could once again dominate the world’s economy and might use its economic and military strength to threaten its neighbors, Taiwan and Japan, and to control the world’s political and economical agenda.

As much as this recent trend is solid – and there are many reasons to believe that it will continue in the decades ahead – there are also reasons to be cautious, for this is not the first time in history that we see emerging markets doing well for a good number of years before a serious crisis stops their development. The economic center of gravity pendulum might shift back westward, if Europe and the United States will be able to use their innovative minds to create a new economic revolution.

We certainly live in interesting times.

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David Author
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12 COMMENTS

  1. I remember seeing something like this a while back. I think it might have been an author talking about a book he wrote on a late night show. He was talking about how major economic resources and activity usually occured in Asia and there was the temporary shift towards the US. This was because it was a huge untapped land mass of natural resources. Now that it’s been settled and resources aren’t undiscovered, the shift is regressing back to where it always was.

    • Exactly. I know it is difficult to predict the future, but this seems to be the most rational prediction. China is dfinitely going to change the world.
      Thanks Micro!

  2. Interesting concept – I think Asia is just too big and advanced, I don’t know that the US will be able to sustain the type of growth that Asia has been able to.

    • I guess this is true. I am sure that even though China is having such a rapid growth, the US will be able to sustain it. The US won’t be on top, but they will surely be close; however, not when it comes to population. 🙂
      Thanks for stopping by!

  3. Definitely interesting times we live in. Dr. Doom is pessimistic…well of course he is, and drawing some correlation from 1914 to 2014…right before WW1, except this time it might involve China/Japan. Hopefully that doesn’t occur.

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  6. I have actually never seen this map/image, so thanks for sharing. Very interesting to see the somewhat rapid shift east since 1950. Interesting times for sure!

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