Larry Summers recently wrote an op-ed for the Washington Post arguing that the US has made a series of huge missteps around the China-led Asian Infrastructure Investment Bank. Several countries, including many stalwart US allies, have joined the bank, a development Summers interprets as a shift in the global economic order.
Business Insider’s Myles Udland summarized Summers’ argument, writing that “the global economic tide has started receding from the US and moving towards China.”
Of course, if the center of the world economy does move towards China, it will just be going home.
This map, made by the McKinsey Global Institute, is a cool visualisation of data from the work of the late historian Angus Maddison on economic development around the globe over the past 2,000 years. McKinsey took the geographic center of each country, and at each year indicated on the map, used Maddison’s estimates of the gross domestic product for that country to find the approximate economic center of mass of the world and how that center has moved over time. Researchers also used their own models for the development of global GDP over the next few years to project where they think the center of mass will move by 2025:
The most striking aspect of the map is the boomerang-like path of the center: From the days of the Roman Empire through the middle of the 20th century, the center of mass moved west. For centuries, China, India, and southeast Asia were some of the biggest economic powerhouses in the world, and the westward shift only accelerated during and after the Industrial Revolution in Europe and North America.
Since the mid-20th century, with the rise of emerging markets in Asia and elsewhere, the center has begun to shift back to the east and south. If McKinsey’s projections about demographics and growth in the next few years are correct, that shift will only continue and accelerate, as emerging and developing markets continue to grow rapidly while developed markets grow at a much slower pace.