Monday, December 28, 2009

Niall Ferguson: world tilts towards Asia

Niall Ferguson is out with a new opinion piece in the FT that discusses China, America, and "the decade the world tilted east".

"I am trying to remember now where it was, and when it was, that it hit me. Was it during my first walk along the Bund in Shanghai in 2005? Was it amid the smog and dust of Chonqing, listening to a local Communist party official describe a vast mound of rubble as the future financial centre of south-west China?


That was last year, and somehow it impressed me more than all the synchronised razzamatazz of the Olympic opening ceremony in Beijing. Or was it at Carnegie Hall only last month, as I sat mesmerised by the music of Angel Lam, the dazzlingly gifted young Chinese composer who personifies the Orientalisation of classical music?

I think maybe it was only then that I really got the point about this decade, just as it was drawing to a close: that we are living through the end of 500 years of western ascendancy."

Ferguson has been thinking and writing about the rise of China and the shaky state of the US' undeclared empire quite a bit lately. He now points out, citing economic research from Goldman Sachs, that China could surpass the US economy in terms of GDP by 2027.

The long-term trends of rapid industrialization in developing nations and the gradual transfer of wealth and economic influence towards Asia are undeniable. However, one has to wonder if the current strength of the Chinese economy and the effectiveness of its stimulus efforts are as solid as Ferguson seems to believe. On these points, he and hedge fund manager, Jim Chanos may disagree.
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