Tags: Gupta | Dangerous | Decade

Professor Gupta: We're Living in a Dangerous Decade

Monday, 19 Sep 2011 08:00 AM

In the century running from 1950 to 2050, the decade we're in now is the most dangerous as economies make adjustments to account for Asia's rising global influence, says Anil Gupta, professor of strategy at University of Maryland.

"I see this as the inflection decade. Developed economies still make up 70 percent of the world's GDP but by 2020 they will account for less than 50 percent," Gupta tells CNBC.

"After 2020 the chronic problems of the developed economies will have much less serious implications for the global economy. By 2025 Asia's GDP will be larger than that of the U.S. and E.U. combined but the global impact of any turmoil will be less."

Others agree, including Philip Poole, global head of macro and investment strategy at HSBC Global Asset Management, who says western dominance of the global economy is waning.

"The world is going to shift increasingly eastwards away from the West and the developed economies and their relative importance will continue to decline. We need to adjust to the view that growth in developed economies will be lower than pre-crisis levels and has Japanese characteristics and that the developing world will dominate," Poole tells CNBC.com.

China, meanwhile, is sitting on $3.2 trillion in foreign reserves, the world's largest such stockpile, according to BBC calculations

Yet while China is dependent on a strong global economy, some say the country should resist rushing to a leadership role in global affairs.

"When the world looks to us for help, we should keep our cool and not feel too flattered," says Liu Changle, the chairman and chief executive of Hong Kong-based Phoenix Television, according to the Wall Street Journal.

"Life is much easier for No 2," he says, adding "when the sky collapses, there will be a No 1 who will hold it up."

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In the century running from 1950 to 2050, the decade we're in now is the most dangerous as economies make adjustments to account for Asia's rising global influence, says Anil Gupta, professor of strategy at University of Maryland. I see this as the inflection decade....
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2011-00-19
Monday, 19 Sep 2011 08:00 AM
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