Several posts ago, I presented some numbers by Angus Maddison on the evolution of global GDP output shares over the period 1500 to 2001 which showed that Asia’s share of world GDP declined from 1500 to about the mid 20th century but has since been rising. I decided to try and do a bit of an update using the IMF’s World Economic Outlook 2012 Data Tables which provide GDP in US purchasing power parity dollars up to 2011 and then estimates after that to the year 2017. The results are both simple and complex.
If you look at Figure I, I've divided world GDP into three groupings: Asian countries (including Japan), the “West” defined as the United States, the European Union and the British Settler offshoots of Canada, Australia and New Zealand and then “Everyone Else”. According to these figures, in 2000, Asian countries – whether industrialized or developing – together accounted for about 27 percent of the world’s output. The “West” accounted for 52 percent while “Everyone Else” produced about 22 percent. By 2011, the share of the Asian countries had increased to 35 percent while that of the “West” was down to 42 percent. Meanwhile, that of “Everyone Else” had increased to 23 percent. Based on the estimates of GDP through to 2017, eventually, the Asian countries will account for 39 percent of world output, the “West” 38 percent and “Everyone Else” 23 percent. This threefold division suggests a much more equal balance between the world shares of GDP though the “West” (as defined here) will still have a much higher per capita GDP given that while accounting for 38 percent of GDP, it will likely account for less than 10 percent of the world’s population.
A more nuanced picture emerges when the groupings are broken up a little further. The picture is now a bit more complex. Over the period 2000 to 2017, China’s share of world output will grow from 7 to 18 percent and will likely surpass that of the United States in that year. The US share of world output will fall from 24 percent in 2000 to about 18 percent in 2017. The European Union’s decline will be somewhat steeper, going from 25 percent in 2000 to 17 percent by 2017. The Asian ascent is not uniform. Japan’s share of world output will actually shrink from 8 percent to 5 percent. As for Latin America and the Caribbean, the Middle East and Africa and Russia, well their output shares will stay pretty much constant over this entire period. What about Canada, Australia and New Zealand? Their combined shares of world output are expected to decline from about 4 percent in 2000 to 3 percent by 2017. In fact, their combined economies will be about the same as Russia.
There seems to be a rebalancing of world GDP underway in the early 21st century and a more multipolar world is a good thing. I'm not sure the important question is whether the 'West" is in decline or Asia in ascent. The more interesting question is perhaps why the output shares of the rest of the world outside of Asia and the "West" are not changing very much.