Who really won the Cold War? Maybe China.
In 1972, Cold War logic pushed President Richard Nixon into an unlikely alliance with Mao Zedong—bringing China back into the mainstream of the world economy. In 1991, the collapse of the Soviet Union encouraged “end of history” hubris that blinded the West to the consequences of China’s rise.
Fast forward to 2020 and China has emerged as a major global power, its single-party rule and state-dominated economy the cause of alarm in foreign capitals—and pride in Beijing. By 2035, Bloomberg Economics forecasts, China will have overtaken the U.S. to become the world’s biggest economy and perhaps also its most powerful political actor.
China’s rise is just one part of a larger shift that’s already under way and looks set to accelerate in the decades ahead.
Bloomberg Economics has used a growth accounting framework—adding up the contributions of labor, capital and productivity—to forecast potential GDP through 2050 for 39 countries, from the U.S. to Ghana. We’ve used that data to map some of the key geographic and political shifts in store for the world economy.
The results suggest that a remarkable period of stability, stretching from the end of World War II through to the early 21st century, is coming to an end. The center of economic gravity is shifting from West to East, from advanced economies to emerging markets, from free markets to state controls and from established democracies to authoritarian and populist rulers. The transition is already upending global politics, economics and markets. This is just the beginning.
Much could happen to throw our projections off track. The Covid crisis is demonstrating how pandemics can reconfigure the global economic map. Wars, natural disasters and financial meltdowns can do the same. So could policy choices on globalization and climate change. Still, absent a crystal ball, forecasts of potential growth provide the most reliable basis for thinking about the long term.
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