16 Mar 2018

Examining the geoeconomics of the 21st century

Michael Lind, co-founder and fellow of the think tank New America, gave a lecture at the WTI on 14 March focused on the geoeconomics of the 21st century and the prospects for global growth following the great recession of 2008-9.

The speaker's talk was illustrated by slides showing demographic and productivity projections until the end of the century.

In terms of demography the next 30 years will see the rise of sub-Saharan Africa and India, and an associated shift in the centre of gravity of the world population and economy, Lind said. By 2100 the global population is projected to be 11.2 billion.

But there is no direct correlation between demographic growth and economic wealth, and relative incomes in 2050 will be much the same as now, PwC figures show. The countries that are the wealthiest today will still be the richest then but with a smaller share of the world’s population.

In terms of global middle-class consumption there will be a dramatic change with the growth of the middle class in China and India, according to global trends from the US National Intelligence Council. Sub-Saharan Africa, however, will remain very poor.

By 2050 we will be living in “a strikingly different planet”, Lind said, with global GDP reflecting the change in the relative importance of the different economies. While the US and Europe will be in decline, Asia will be on the rise. China’s share of GDP by the middle of the century is estimated by the European Commission to almost equal the combined share of the United States and the European Union.

East-West trade rivalry

Trade rivalry between the US and China is growing, Lind said, and reflected in two major trade deals: the failed Trans-Pacific Partnership (TPP) that included the US until President Trump withdrew in January 2017, and the proposed Asian Regional Comprehensive Economic Partnership (RCEP) that includes China.

According to Lind, former President Barack Obama wanted the TPP in order to write the rules of Asian trade and weaken China in the global economy.

Meanwhile China is pursuing its ambitious Belt and Road initiative – that aims to connect Asia, Europe, the Middle East and Africa – for infrastructure-led growth and as a means of “using economic diplomacy for geopolitical ends”, according to Lind.

In conclusion, the speaker said the period in history where there was one superpower – the US – was now over. “We’re in the early years of a second Cold War with China and Russia,” he warned.

Michael Lind is a Visiting Professor at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin. A former editor or staff writer at The New Yorker, Harper's, The New Republic and The National Interest, he is the author of numerous books on politics, economics and history, including Big is Beautiful: Debunking the Myth of Small Business (MIT Press, 2018) and Land of Promise: An Economic History of the United States (HarperCollins, 2012).