Back from a blissful and disconnected few days in Italy, and now paying the price in terms of catching up with the backlog of reading and emails, so this week will mostly be signposting interesting stuff, rather than trying to write anything original.
Two graphics from this week’s Economist underline the rise of the G2 (US and China). First up, the astonishing rebound under way in East Asia, as China’s fiscal stimulus pulls not just its own economy but those of its neighbours out of a sharp V-shaped recession in a recovery that European and US leaders can only dream of. Even after a slump in the first quarter, ‘emerging Asia’ is likely to grow at 5% in 2009, compared to a 3.5% contraction in the G7 – an unprecedented growth gap of 8.5 percentage points. This is the statistical basis for all that talk about geopolitical shifts, tectonic plates, and the emergence of the G2, seen for example in last week’s bilateral US-China talks on climate change.
The second graphic underlines the point at the level of transnational corporations. Of the world’s top 9 companies by market capitalisation, 4 are Chinese (including Petrochina, the world’s biggest company) and 5 are from the US. Other countries only get a look in after the tenth slot.
Were the European Union to get its political act together to match its combined economic muscle, the G2 could become a G3. That could happen if the EU agrees the creation of two high level jobs: a president of the European Council, (which brings together all the national governments) and a ’high representative’, a kind of European foreign minister. The Economist also has the latest gossip on the jockeying for those positions.