2004-2014 http://www.statista.com/statistics/270267/united-states-shar...
1980-2010 http://en.wikipedia.org/wiki/File:US_share_of_world_GDP_sinc...
First: the claim is that the world's economic base is shifting to the Asia Pacific - not that it is already there. One reason for this is that these (huge) economies are emerging into consumer rather than producer economies and another that much of the modern industrial capacity for 21st century goods (e.g. electronics) are centered in this area. The Renminbi is a credible threat to the dollar.
The second thing is that this is the perception of the Western world - it is the reason for the Bush and Obama administrations' joint plan for the Pivot to Asia. Maybe our government is wrong - but this perspective is what informs it and is leading its decisions.
The third thing of course is that your dossier is very coarse. It fails to mention the problems in the Eurozone and the financial crashes centered around the dollar. It casts the Spanish economy in good light and the Chinese one as bad. It mentions Canada's growth, but not that it has been driven by investment in China. Curiously, it uses Japan as a comparison for the US economy - a country I would consider on the Western system - and later uses Japan as an example of why the Asia Pacfic is weak.
Finally, economics have more to do with growth than they do with wealth. It does not matter that Asia is not (so) wealthy right now. What matter is that the growth is and will be centered in the Asia Pacific. The investment, global investment, will be there. Everyone wants a piece of the 7%+ pie. This while the Western world, while rich, is struggling to grow at 2%. It is not enough to look at who has the wealth - you need to look at who will be getting wealth.
What Washington thinktanks are talking about right now is:
- How can we get the Japanese people to agree with expanded US military deployment there?
- Can we get S. Korea to reunify with N. Korea, what would China think, and what are the prospects for Korea to become a world power?
- What broad power plays are going to be made by Xi Jingping? How can we prevent China from gaining control of the major ocean trade routes?
- What investments can the Western World make in Eurasia? Can a strong partnership with India, with its emerging economy and large population, enable us to compete in the region? How can we keep India off of the AIIB (esp. wrt coal)?
(And of course a great number of things not related to the Asia Pacific, like how to keep the Arctic as a no-man's land)
So anyway, I'm not actually making the claim that the Asia Pacific is going to be the center for economic growth of the world for the next 40 years. I am more properly making the claim that Western institutions believe this and are responding to it.
If it weren't for perpetual stimulus, and truly epic debt accumulation, their economy would already be contracting. And that's before the bottom billion people in China have an opportunity to participate in a better life. The painful reality is, there are not enough resources, savings, or consumers to lift China's bottom one billion up to even the levels of a mid tier economy (~$15k incomes) - at least not in this century. They're entering Japan's debt phase of the post growth bust - the point where the country gets desperate to maintain its growth and so turns to accumulating debt - and they're doing so before having even a mediocre social safety net.
When you have to take on $5 in debt to get $1 of GDP growth, your growth is over. Ten years ago their return on invested capital, and return on debt had already begun to plunge. At this point China is far beyond yielding good enough returns on the debt they're accumulating. Now it's merely a question of when China enters a debt panic, as all of their 'growth' gets starved out due to debt obligations.
7% GDP growth equates to $600 to $700 billion in new GDP per year for China. They're taking on $4+ trillion per year in new debt annually. To maintain above 5% growth, they will probably have to take on another $30+ trillion in new debt the next six or seven years alone (based on what it has taken to reach the growth levels of the last five or six years, and assuming a continued decline in return on that debt).
Their liquidity mess has resulted in one of the greatest stock market bubbles in history and will soon implode; 2/3 of the investors participating don't even have a high school equivalent education level. Their real estate bubble has already begun to implode, pushing fleeing money into the new bubble in equities. They're also bleeding foreign capital, whereas previously capital was desperate to enter China.
There are only two possible outcomes for China the next 20 years. A lost 20 years like Japan, for similar reasons, following the implosion of both a real estate and stock market bubble (again mirroring Japan). Or China acts very aggressively, very quickly to curb debt accumulation and to pop existing bubbles - that will result in extremely mediocre growth (1% to 3%) for a decade or two, after a period of painful contraction.
Consistently, on the other hand, what I hear from Washington strategists is that they can not make policy decisions based on the hope that China's economy with deflate or implode (not to mention that this would offer its own kind of disaster to the West - look at what Thailand unpegging the dollar did in '97). Their assessment is quite divergent from yours. Although it shares so many features with the many before you who have wrongly predicted an implosion it would be interesting if you were right. To reiterate my earlier point Washington behaves off its beliefs and it believes that growth in that hemisphere, plus growth in China, will make the Asian theater the dominant one for the next half century.
Luckily for the world all predictions made in this thread are falsifiable - we need only watch to see what happens over the next couple of decades to find out. :)
The US still has the same share of global GDP that it had 35 years ago, and faces no credible threat to the dollar's dominance. The US economy is larger than the size of Japan + China combined, and is now 250% larger than Japan, and that gap will increase significantly. Canada has become vastly stronger over that time, it has as large of an economy as India with just 2.7% of the population (with not even a small fraction of the problems that India faces).
Mexico's GDP has doubled in 15 years. Brazil has become one of the major GX economies, with an economy 50% larger than Australia or South Korea.
Spain has as big of an economy - even after all the problems they've had - as South Korea (which is the #4 economy in the Pacific region).
Germany, the #2 economy in the West, is likely to pass Japan's economy in size in the next 10 to 15 years (with 1/3 less people). In the last 20 years that Japan has been treading water and taking on vast debt, Germany's economy has doubled in size post re-unification.
Most of the best countries in the world in terms of high standard of living are in Europe.
Meanwhile the Asia Pacific region has nearly two billion people living in what can only be described as intense poverty by Western standards. China alone has ~600 million unemployed captive 'farmers' earning $3 / day, because there are no other jobs for those people to do.
Japan is in such dire condition 40% of their budget goes to paying interest on their debt, their GDP hasn't grown in 20 years, and they've gotten so desperate they've taken to aggressively debasing the Yen to keep their government solvent (rapidly chopping down the Japanese standard of living in the process). Japan is of course Asia's second largest economy.
China has spent the last six years post great-recession faking their growth by taking on $30+ trillion in new debt, in the process becoming one of the most indebted nations on earth.
Japan and China, Asia's two biggest economies, are facing disastrous demographics issues, while they simultaneously drown in debt (a bad combination when you have to take care of a lot of elderly).
Compare the top 20 economies of the West vs the top 20 economies of the Asia Pacific, in terms of incomes, wealth, standard of living - it's not even remotely a close contest. The 10th largest economy in the West is the Netherlands ($50k GDP per capita); compare them to Malaysia ($10k GDP per capita) or Thailand ($5k GDP per capita).
I fail to see how this sum represents a shift to the Asia Pacific economically.