Daily chart

It's a schimera, just as the 20 year bubble in the west was. You will proclaim a victory from a defeat as well, as zero interest rates for several years, stagnant wages and a worsening living conditions in the west, means that there MUST BE SOME SORT OF ECONOMIC REVIVAL, but a frankenstinian one, a monster that will smash everything in it's voracious way...
Workers of the world unite!

Cornish Expat,

Your theory that Confucian cultures militates against innovation is common, but groundless. If you look at the Global Innovation Index compiled by the Boston Consultancy Group, which is the largest attempt to comprehensively and objectively quantify business and technological innovation across countries, the "Confucian" cultures score quite well. Singapare is ranked #1 out of 110, South Korea #3, Japan #8, and even China is a not unimpressive #21. In comparison, the USA is #9, Switzerland ranks highest at #2, and Italy is #38 with many central and eastern European ex-communist countries even further behind. It is also well known that Japan, so long derided for counterfeits, has more patents than any other country on the planet.

Confucianism is definitely socially conservative and China has certainly been reactionary at numerous points in its history; but does the Confucian sphere really have a peculiarly reactionary character compared to the Muslim sphere, the Indian sub-continent, or even pre-Englightenment Europe?

I would like to put a spoke in these rosy predictions of Asian growth.

It is very human to have something called "adaptive expectations" - what has happened in the near past is likely to happen in the future.

This "trend is our friend" approach is likely to be true in 80 or 90 per cent of situations, otherwise the world would be incomprehensible to most. But the job of the economist is to make projections of when this is not. Make predictions on when an economy will suddenly hit the wall (have you experienced that?), and things turn round and go the other way.

Why am I saying this? Because all the economic indications are that China is likely to suddenly turn round soon and shoot down the slope. The heirs of Chairman Mao are still subject to the iron laws of economics. Despite China's size, resources, and advantages like low wages, China heading for an almighty banking crunch. Just like Japan now nearly 20 years ago.

What happened in China is that the banks have over-lent to the un-profitable state owned industries, and to another massively over-priced sector, the property sector. Property prices have already peaked. They will crash, and the banks will be left with massive levels of dud loans. (Seen that recently? Ah, yes, the Eurobonds.....and US CFD lending just before that. And so it goes on.)

Anyway China's state owned banks (ownership makes no difference to economics) has over-lent to un-profitable State owned enterprises plus to developers, especially those with political connections. Land development has gone mad in China, because anyone with political connections can grab all the land they want at a knock-down price. As a consequence.....Yes, the Chinese banks have made, from the economic point of view, excessive dud loans, and are at the moment teetering on the edge. (Yes, Chinese banks). As the economy contracts property prices will fall and the state owned industries will cease to pay interest to the banks. And so on, and so on. Chinese bank lending will suddenly cease.

When the bank lending stopped in Japan, the whole economy went into lock-down. Over ten years of very foolish and ignorant economic policy later (aimed mainly at saving banking profits,,,where have we heard this before? Ah yes, the EU!) Japan only recently began to crawl out of the pit.

Will being part of a communist economy make any difference? Nope. Monetary contraction is monetary contraction. The Chinese economy is just as equally dependent on bank loans and intermediation. The economy will massively contract. All that steel making will nearly stop dead.

All because of the banks, bad regulation, and very foolish economic policy. Now where have we heard this before?

you have to wonder about these predictions of economic growth based on the fact that the forests necessary for rapid growth will not be around in 40 years at the rate we are going.

Trying to predict world GDP for 2050? Let start with forcasts for 5 maybe 10 years forward and see what happens. Hell lets try accuratly predicting for next year, its safe to assume most of us would get even that incorrect.

@connect the dots,
The US and UK share a relationship that China can never hope to repeat, shared history, progress and wealth. The modern economy climate also does not rely on gold, which is why past empires declined.

Asia can account for 50% of GDP today but they also account for 4+ billion people versus barely 1 billion for N.America and Europe (the pop'n will continue to skew). Japan should be included in with the West since its head and shoulders above the rest of Asia, stats or no stats, so transfer a few trillion in GDP and a handful of people over to the Western sphere.

China is also seeing the beginning of an aging population which will only aggravate its social hindrances that have been delayed by the communist party.

2050 or 2100 or 3000, the West will still be the destination of choice, especially N.America. We have an abundance of everything but not enough people.

These projections are just fictional exercises, as everywhere societies can enter and leave traps.
The post-Communist countries are leaving one trap, and the outcome can change the picture. Who knows whether some of them will become new Chinas?
Some European countries are trapped into their glorious pasts and their present properity and don't see the real need for change (perhaps the financial crisis and the structural problems of the Euro will change that picture).
Latin America is also a region of maddening continuity, strongly reducing growth (excepting the developed world, LA was the region with the smallest growth during the last decade). Nevertheless Brazil, Chile, Peru and Colombia are gradually changing that picture, though moving in distinct directions.
There is a mini-trap that is the tentative for a multinational currency in Europe which is dangerous both ways. If unsuccessful it can lead to years of economic recession in Europe, together with international tensions. If successful it would reduce the need for some countries leaving their traps (Greece, with an unrealistic national project, did just that, up to a catastrophic end). The Euro success would, on the long term, be important for the whole world as it would create another international currency but no one does that risky business out of considerations of global generosity and long-term prosperity. In the long-term all of us will be dead.

The traps for any country (or any group of countries)are many: bad eductional systems (a thermometer for the social priority for learning), social inequality, reliance in the export of commodities and low-tech goods, reliance in the remittances of expatriated nationals, bad political and juridical institutions, aggressive foreign policies (they sometimes lead to wars and always lead to the waste of public money), badly managed ethnic and regional diversity inside the country, and too much reliance in the lessons from the past.

Regrads from Brazil

The future is not predictable with accuracy yet trendlines and historical data provide useful clues.
When it is about countries as collective entities - each one being a rather complex reality on its own - fast paced development is fuelled by internal as well as external variables.
Both these remain largely favourable to fast economic growth even if slower than up to now.

Besides, Asia is not a homogeneous bloc that moves forward unhindered by what happens internally within each country and elsewhere.
It does share one important specific characteristic: emerging economies possess vast untapped potential both in demography and unfulfilled needs.
This is totally unlike countries that already reached developed status long ago such as Japan and the original Asian tigers to a lesser degree.

I would group Asian countries into three tiers: developed, middle-income developing fast and low-income developing very fast.
All together make up the world's fastest growing continent with the greatest potential to keep growing for many years to come.

It is way too soon to claim that their rise is running steamless as much as overstating that ascent in the longer run.

That shows how important is R&D to escape from the middle-income trap, and Government intervention, because stealing and copying technology is what has promoted high quality production in several countries in the World. Even the U.S. did so after WWII from Germany, and Japan did so from the U.S., and S.Korea from Japan, and China from S.Korea....

In fact, there is also a high income-trap in developed nations like Spain, Italy or Britain, with a GDP over $30,000 which look unable to compete in several fields with more competitive nations like Germany, Japan or Netherlands...

Or perhaps they can compete in some fields (for example, Spain in renewable energy, tourism, high speed railways or construction) while are unable to compete in other fields (machine tools, high quality vehicles...)

look forward to the prospect！

PRODUCTION CRISIS AND ECONOMIC CRISIS
The two are having the same origin.
By opening up and internationalizing the old economies the succes of the companies became separated from their mother countries - the companies prospered but the countries started their gradual decline. A decline which was made invisible by the handeling of those old industrialized economies, leadin to a gradual but escalating bouble.
http://unifiedscience2.blogspot.com/2011/02/deeper-causes-of-downturn.html

I suspect the 50% attribution to China and India for around 1 AD to 300 AD is due to an extrapolation of rough demographic parity between the Roman Empire, Indian subcontinent (not necessarily any one polity) and the Han empire.

Depending on who is doing the guessing, seems roughly 60 million people populations are guessed for each.

Then it seems an additional 60 million is swagged for the rest of the world.

However, the historical demography of the Americas is controversial, with Mexo-American and Andean cultures representing points of interest that could upset assumptions.

Similarly, I am not sure there is a full account of the societies of south east asia, Japan and those living roughly within the boundaries of the Parthian/Sassanid Persian polities, let alone Africa and central asia (where all those nasty barbarians seem to originate from).

Maybe it does just add up to 60 million for all the rest?

After 500 AD I think it is pretty clear that China (from 600 AD under the Tang) as well as the Indian subcontinent overshadowed Europe in sophistication and demographic size.

Heck the caliphate dominated middle east around 700 AD was probably a better place to hang out than in non-Byzantine Europe (if not the Byzantine balkans/anatolia regions too).

Seems Northern Europe (i.e., UK and the Netherlands at least) started to edge out Qing China in terms of living standards by 1750.

Seems the average white British North American had as high, or even higher living standards than UK counterparts due to cheap food and land, as well as benefiting from booming trade in consumer goods, (Hessians thought the rebelling colonists were well off). Hence those folks probably had a per capita wealth lead over Asia for around 260 years now.

Of course, Japan seemed to have broad literacy (50 percent for adult males), and great standards on hygiene (like regular hot baths). So measuring quality of life may be relative. Also, they had a sophisticated agricultural economy (including a futures market of sorts) and crafts industries,

If as Juancarlosiv mentioned,the world GDP is about $62 trillion, is it practical to expect to be 4.7 times larger? In only 38 years?

Seems the expection is out there that the world population will stabilize around 9 to 12 billion people by then (so 28.5% to 71% larger)...

Does that suggest large wealth income gains for what may now be deemed the economically marginal.

Did this occur over the last 38 years (since 1972?)

The other world GDP prediction seems more realistic - at 3 times the current world GDP.

Otherwise, are these figures in the chart based on PPP? If so, does that tend to inflate or deflate the size of estimates?

It truly frustrates me to see such over reaction to China. While they are no doubt growing, and doing it at an astounding rate, many people overlook the simple fact that China, in the past 30 years, has done what took the West 100 years to do. China, and the rest of the developing world, have numerous social and political problems that they have to face. They have been moving so fast, that they have left those problems behind and decided to deal with them at a later date in favor of more growth now. All of those problems will catch up to them. 30 years of growth does not equate to long term stability. Simple as that.

Regards,
Java

2000 years ago the Roman empire accounted for more than 25% of world GDP. Their iron ore production was 8 times larger than China's production, Gold 5 times, etc.

The actual inhabitants of the lands of the Old Romans + germanic/nordic nations (UE) stills have an enormous advantage over asia in every economic / human development indicator.

And that's without noticing Americas discover 500 years ago, so keep dreaming with an all mighty China / India, that can't even feed himself or produce enough energy or iron ore or uranium, etc.

I don't see why, without reasoning and evidence, we should take for a granted a return to the so-called "historic" or "natural" position with Europe being merely the insignificant Western periphery of Euroasia and the US something of equivalent importance.

The pattern in the past 500 years had been that mere population ceased to determine economic clout. Now one might argue that this is starting to change, that indeed population is once against beginning to become the crucial determinant of economic prowess. However interesting this theory maybe, it is far from being obvious and inevitable.

I don't see either India or China being in the so called "middle income trap" as that much of a problem for either country. Even if GDP per capita is stuck at $10,000 they will still be the biggest economies in the world by far, the majority of which will by that time be relatively affluent, so their grand global political ambitions will probably not suffer.

On another note, I reject the notion that India and China are "reverting" to their "historical place". As a historian I see this as a purely political and contemporary statement, made an unobjective individual with any real understanding of historical inquiry or indeed economics.

1. China's continued growth may depend on whether its engineers and marketers can evolve from brilliant reverse-engineering and copying western technologies/products to true product developers and innovators. Their very dynamic entrepreneurial culture seems counter-Confucian but I have heard it argued that, in effect, the Confucian culture mitigates against innovation, so I am not so sure. (For example, Japan innovated in manufacturing, albeit based on American ideas, but there are very few examples of product innovation.)

2. Growth in Asia has, so far, defied the logic that a stable, growing economy depends on the consistent, fair and reliable application of the rule of law. Is this sustainable?

3. I can not make head or tail of the donut on the right.

Actually, China and India for most human history had the biggest economies because they simply had the biggest population but this is not true for every period.

For instance, 2000 years ago the bigget economy was that of the Roman empire (in fact even Angus MAddison himself pointed out that the GDP per capita of the roman empire was 25% higher than that of China and India - but he used an estimative that roman population was 44 million while most historians agree that Roman population was at least 60 million and probably more... Han China had 60 million and India had less). Although, if you add up China and India, their economy would be bigger but they had a smalle pro capita. Metal production, lead production, trade figures pointed out that Rome had a superior economic vitality (it must be said the Keith Hopkins proved that 2000 years trade by sea was 60 more efficient than trade by land and 6 more effcient than trade by land).
---

Regarding the future, i dont see how China and India can arrive to 50% of the world economy; certainly they wont have 50% of the world pop. It is also important the fact that China pop will decrease on the long run and China prospects will probably fare much better than India.

Your 2nd chart shows the "middle-income" trap.

But "Consider This:"
There may well be an "upper-income" trap that nations fall into.
Have any of the ivory tower guys looked into that possibility?

(Twilight Zone music)

Regards