𝐆𝐥𝐨𝐛𝐚𝐥 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐏𝐨𝐰𝐞𝐫 𝐒𝐡𝐢𝐟𝐭𝐬 𝐁𝐚𝐜𝐤 𝐭𝐨 𝐀𝐬𝐢𝐚, 𝐄𝐯𝐞𝐧 𝐓𝐡𝐨𝐮𝐠𝐡 𝐂𝐡𝐢𝐧𝐚’𝐬 𝐆𝐫𝐨𝐰𝐭𝐡 𝐇𝐚𝐬 𝐒𝐥𝐨𝐰𝐞𝐝

The Group of Seven (G-7) nations are likely to see their economic dominance and wealth distribution eroded as China and other rising Asian economies continue to grow their proportion of global production. A number of analysts, including the International Monetary Fund (IMF), have shown that Western economies are losing ground to their Eastern counterparts over the long run. In 2022, the emerging and developing economies accounted for about 60% of the world’s GDP, while the percentage of the G-7 countries’ output had dropped to 30%. China is responsible for around 19% of the world’s gross domestic product, and emerging Asia as a whole contributes 33%.

In comparison to India’s 6.8% annual growth rate, China’s real GDP has increased by 8.4% throughout the past 20 years. This growing disparity is the driving force behind the change in the global distribution of income. Emerging economies still lag much behind industrialized economies in terms of per capita earnings. China accounts for over 50% of emerging Asia’s GDP, and the region’s rising economies will continue to dominate for the remainder of this decade.

By 2030, 37% of the world’s revenue will come from emerging Asia, while the G-7 countries’ share will fall further to 27%. As a result of this steady movement, the global balance of economic power will continue to change in the decades to come, even though the North Atlantic and the North Pacific will still dominate world economic output. In terms of the percentage of global income, the United States contributes 15.4%, China 18.8%, and India 7.6%. The Chinese economy has been growing at a slower rate of 5-6% since about fifteen years ago. Problems with excessive saving are limiting the country’s ability to invest its huge reserve fund constructively.

During the last 20 years, China’s real GDP has grown at an average rate of 8.4% each year, while India’s has grown at an average rate of 6.8%. This disparity in growth is what causes the shift in global income distribution. The per capita earnings of emerging nations are still significantly lower than those of developed economies. More than half of emerging Asia’s GDP comes from China, and for the rest of the decade, Asian rising economies will lead the pack.

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