China will "take over" America?

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The world economy is now in super-cycle. This is a period of historically high global growth, which lasted a generation or more. Super-cycle is marked by the emergence of this rapid economic growth enjoyed by countries such as China, India and Indonesia now.

There are many factors driving this occurrence, including increased trade, high levels of investment, rapid urbanization and technological innovation.

Historically, the world economy has twice previously enjoyed a super-cycle. First, 1870-1913, experienced a significant pickup in global growth. The average world economic growth at 2.7% per year, one percent higher than the previous. The cycle was led by the emergence of the United States, as well as the emergence of increased trade and greater use of technology from the Industrial Revolution.

Super second cycle, from 1945 until the early 1970s, average growth of 5% and is characterized by post-war reconstruction and the catch-up in most of the world. It also marked by the emergence of large middle classes in the West and exporting countries in Asia, led by Japan.

Now, we may be in a different super-cycle, but with similar aspects such as the two super-cycle earlier.

For people in Asia and around the world, the idea may sound unusual growth. But for many people in the West, the mind of the Super-Cycle is not unusual considering this is a problem facing the world economy. In fact, the world economy is now more than U.S. $ 62 trillion, about twice that a decade ago, even had surpassed pre-recession peak.

Over the last two years, the economy has rebounded driven by policy stimulus in the West and by strong growth in the East. Indeed, markets in developing countries, which is the third of the world economy, now reaching two-thirds of its growth. This trend is likely to continue.

By 2030, the world economy could grow to U.S. $ 308 trillion. This projection means that the real growth rate of 3.5% for the period beginning in 2000 - when the Super-Cycle begins - until 2030. Or an average real growth of 3.9% from now until 2030. This will be a significant improvement compared with growth of 2.8% during 1973 to 2000.

Exceptional situations is not only a possibility of expansion of scale, but also forecast that is based on growth projections that are too cautious. For example, China is expected to grow an average 6.9% per annum during the period 2030 and India amounted to 9.3%.

In 2030, India may have become the third largest economy in the world. In addition, Indonesia, which currently ranks 18th largest economy is likely to move into the world's fifth-largest in a period of twenty years, after enjoying almost an average of 7% growth during that period.

Indeed, there is always a risk that can affect global growth. Super-first cycle ended with the outbreak of the First World War, the second with the oil shocks beginning in the seventies. However, this time I hope the world has a better position to overcome the risk of international decision making bodies and policy forums such as the G20.

It is important to emphasize that the super cycle does not mean that growth will continue to strengthen during the entire period. In the last three or four years I was among the most pessimistic about the U.S. economic growth. I'm still cautious because the U.S. economy is still going to struggle next year with growth below trend. Likewise, Europe and Japan, both will face short-term prospects are still sluggish with flat growth.

Therefore, the development will be more remarkable if Asia can encourage more growth of their own. Moreover, it is much needed world.

Next year, China will see the first year of a five-year plan of the 12th. This is supposed to help their growth. However, China and other central banks across Asia will tighten policy to contain inflation. In turn, this should enable a more sustainable growth, but with a level close to or even below that seen in this year. So, in Super-Cycle, it is clear there will be a challenge for policy makers.

As the importance to focus on short-term challenge, but very important still see long-term opportunities. During the Super-Cycle, we believe that China could replace U.S. as world's largest economy by 2020, far faster than many predicted.

However, the estimate was the most important are the stories that happen behind it.

No doubt, there are economies of scale are emerging. Along with its growth, developing countries would provide a greater influence on the world economy. Likewise with the impact of the growth of new trade corridors. Nearly 85% of the world population is increasingly interconnected through trade, thus allowing the number of people who will contribute to the global economy.

Sources of funding will become an important growth driver, given the high investment needs, particularly in infrastructure. Then there are other things that I call the perspiration or sweat from the increasing number of people who work and shop, and also that the greater creativity of innovation and technology.

Countries that will succeed are the country's most lots have the cash, commodities and creativity. In recent years I often explain the situation that was happening as the New World Order, reflecting a shift in the balance of economic and financial power from West to East.

Well, in the middle of this shift is still in effect, the Super-Cycle more accurately reflects what is happening. West is still very likely to succeed with such an environment, especially if there creative economy. But it is clear that Asia will emerge a winner.