Evolution of the earth’s economic center of gravity

Posted on July 17, 2012

















From The Economist: How the world’s economic centre of gravity has shifted

IT IS not exactly news that the world’s economic centre of gravity is shifting east. But it is striking how fast this seems to be happening. In a new study on the economic impact of urbanisation the McKinsey Global Institute, the research arm of the eponymous consultancy, has attempted to calculate how this centre of gravity has moved since AD 1 and how it is likely to move until 2025. Although the underlying maths (which involves weighting the approximate centre of landmass of a country by its GDP) has to be taken with a pinch of salt, the calculations show that the centre is rapidly shifting east—at a speed of 140 kilometres a year and thus faster than ever before in human history, according to Richard Dobbs, one of the authors of the study. The main reason for this is rapid urbanisation in developing countries, in particular China. As people are moving into cities many are becoming richer, driving further economic growth. Most of this growth will not occur in much-hyped megacities, such as Mumbai or Shanghai, but in what the authors call “middleweight cities”. Few in the rich world would be able to identify these on a map. Ever heard of Foshan or Surat, for instance? (Hint: the former is China’s 7th-largest city, the latter India’s capital for synthetic textiles.)



Posted in: economy