The Economic Power Shift from the West to the East

This report describes the shift of economic power from the western countries to the eastern one, based on the changing economic conditions of China, India and South Korea. It discusses the implications of this shift and the threat it poses to the US and other developed western countries.

Running head: THE ECONOMIC POWER SHIFT FROM THE WEST TO THE EAST
The economic power shift from the west to the east
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1THE ECONOMIC POWER SHIFT FROM THE WEST TO THE EAST
Executive summary:
Over the last few decades, western countries, especially the U.S, has experienced the leading
position in international economy, which in turn has helped those countries to enjoy various
socio-political and economical power. However, from the fast few years, some Asian
countries, especially, China, India and South Korea are significantly their market condition,
and going to capture the leading position worldwide.

2THE ECONOMIC POWER SHIFT FROM THE WEST TO THE EAST
Table of Contents
Introduction:...............................................................................................................................3
Shifting of economic power:......................................................................................................3
Economic Implications:.............................................................................................................5
Conclusion:................................................................................................................................6
References:.................................................................................................................................7

3THE ECONOMIC POWER SHIFT FROM THE WEST TO THE EAST
Introduction:
The world has experienced strong position of most of the western countries, for
instance, the U.S.A and the U.K, in the form of economic development, education, political
power and technology, which in turn has helped those countries to possess a leading position
in international market. However, according to the recent economical trend, eastern countries,
like China, with their increasing market share, are going to capture the leading positions of
those western countries (Harris, 2018). This report is going to describe this shift of economic
power from the western countries to the eastern one, based on the changing economic
conditions of China, India and South Korea.
Shifting of economic power:
Since the beginning of colonial time, Europe has most of the countries, worldwide.
However, after the Second World War, the U.S has captured this ruling position from Europe
and from that time, has remained the world’s leading country. However, over the last few
years, most of the Asian countries, especially China and India are significantly increasing
their market conditions in international economy (Cashin, Mohaddes & Raissi, 2017).
Through advanced and modern methodologies in the field of economic activities, those
countries have gathered enough financial and economical potential to beat some leading
world economy by 2050 (Layne, 2018). By adopting largest and fastest increasing market
strategies, China has already captured a significant position in the world market and
consequently, is starting to play the leading position in various international activities
regarding decision-making, which in turn, has created huge threat for western countries,
especially for the U.S.A, as it has enjoyed the same position for the last many years. This
situation can be described as the “Thucydides trap”, where the U.S is going to start a trade
war, as they are afraid of the emerging economic condition of China (Feng, 2018).

4THE ECONOMIC POWER SHIFT FROM THE WEST TO THE EAST
Consequently, the U.S has focusing on some other areas, which is adversely affecting
the country further. For instance, the U.S has started to interfere in the economic activities of
the Middle East countries, which in turn has created various outcomes like war, immigration
to Europe and terrorism. This immigration has adversely influenced the entire economic
condition of the Europe. In addition to this, Brexit, the economic crisis of Greece and adverse
condition of Ukraine has led the entire European countries to face economic instability
(Harris, 2018). China has utilized this instable condition and consequently, is capturing the
same position of those western countries in world market.
India and South Korea, through their emerging international trade, have also captured
a significant portion in the world market, which can be understood by the presence of those
countries in many international groups, who take leading decision for the world economy.
With diverse socio-political and economical conditions, those Asian countries have huge
success to increase their own national income. In this context, it is essential to mention the
leading role of BRICS, (Brazil, Russia, India, China and South Africa) through which, those
eastern countries has decided to form an international monetary institution to compete with
the World Bank (Rasoulinezhad & Jabalameli, 2018). The U.S dollar has experienced the
chief currency in intentional economy because of the World Bank. However, after the
formation of this institution, the U.S. dollar can lose its position and may share an equal
position with China’s currency, the Renminbi.

5THE ECONOMIC POWER SHIFT FROM THE WEST TO THE EAST
Figure 1: GDP growth trend of some leading eastern and western countries
Source: (data.worldbank.org, 2018)
The above diagram has depicted that since 1990, China and India have experienced
significant increase in their national income with a higher rate, while that for other western
countries have remained low. China’s GDP growth rate has remained the higher one, which
in turn has help to experience the leading position.
Economic Implications:
While the leading western economy is facing economic crisis, China, by providing
financial support to other countries and to the U.S for reducing their huge amount of public
debt, is taking a significant position. Moreover, by capturing the world country through
marketing, China is actually increasing its leading power in those countries (Du, Lin & Han,
2018). Through labor-intensive production technique, the country has fully utilized its

6THE ECONOMIC POWER SHIFT FROM THE WEST TO THE EAST
economic resources. This has helped the country’s terms of trade. India and South Korea,
with their modern technology have also going to capture the position of the U.K and Japan.
Conclusion:
Hence, in conclusion, it can be said that, most of the eastern countries, especially
China, India and South Korea, through their increasing share in international market, have
captured the leading position, which is increasing serious threats for the U.S and for other
developed western countries. From being a developing country to the world’s leading one,
those countries have played leading position for other developing countries, as well.

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References:
Cashin, P., Mohaddes, K., & Raissi, M. (2017). China's slowdown and global financial
market volatility: Is world growth losing out?. Emerging Markets Review, 31, 164-
175.
Du, S., Lin, X., & Han, X. (2018). Advantages and Disadvantages of Continued Growth in
Foreign Exchange Reserves. Financial Statistical Journal, 1(1).
Feng, T. (2018). The Analysis on Sino-Us Development under Trump
Administration. Research in Economics and Management, 3(1), 1.
GDP growth (annual %) | Data. (2018). Data.worldbank.org. Retrieved 26 March 2018, from
https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?
end=2016&locations=US-CN-IN-GB-JP&start=1990&view=chart
Harris, J. R. (2018). Who Leads Global Capitalism? The Unlikely Rise of China. Class, Race
and Corporate Power, 6(1), 8.
Layne, C. (2018). The US–Chinese power shift and the end of the Pax
Americana. International Affairs, 94(1), 89-111.
Rasoulinezhad, E., & Jabalameli, F. (2018). Do BRICS Countries Have Similar Trade
Integration Patterns?. Journal of Economic Integration, 33(1), 1011-1045.