The emergence of China and India will reshape the world’s economy over the next few decades and challenge United States domination, said Villager Ian Walmsley, a financial specialist originally from Great Britain.
Walmsley talked about world economic changes in a presentation Monday to The Villages Civil Discourse Club. His presentation will be repeated at 10 a.m. next Monday at the Savannah Center.
He said the economies of India and China, the world’s most populous nations, are in the process of lifting hundreds of millions of people out of poverty.
“We are in a time of incredible change,” he said. “This has never been seen before in human history.”
Walmsley compared the position of the United States to Holland, the top world power of the 17th Century. Despite Holland’s decline as a world power, the Dutch standard of living today is much higher than it was then.
But he predicted the U.S. dollar is likely to remain the world’s reserve currency, barring another major economic crisis and despite the challenge of the Chinese Yuan.
Walmsley said the U.S. economy dominated the world during the 1990s, but declined after the dawn of the 21st Century.
The bust of Internet companies in 2000 and the 2008 financial meltdown were major factors along with higher federal deficits and the financing of two wars. Median family incomes in 2013 were still lower than those in 1999.
“The 21st Century has been the worst economic performance in U.S. history,” Walmsley said.
Meanwhile, China’s economy has been doubling every seven years, rising 125 percent since 2000 while the U.S. economy showed a 5 percent increase.
China’s $17.6 trillion economy now has moved past the U.S. economy of $17.4 trillion, according to the Internationl Monetary Fund.
Innovation, long a cornerstone of U.S. economic dominance, will be shared in coming decades, Walmsley predicted. He said 13 percent of China’s economy is devoted to research and development and the country has poured $1.1 trillion into its infrastructure, unlike the U.S., which invests more money in defense.
“We’re going to live in a much more diverse world,” he said. “I think the great theme of the next few decades will be the revival of India and China to their historical roles.”
Walmsley said the changes won’t be all bad and that a shrinking of the U.S. international footprint may allow the country to focus on its internal needs.
“I’m very optimistic about the future,” he said.