Over the past decades the American’s had their seat reserved at 1st place as the top economically ranked country in the world followed by the European nations and the Japanese. Is this about to change… or is the Chinese bark worse than their bite, or maybe the American’s have them right where they want them to be?
In the Agility Emerging Markets Logistics Index for 2012 they found that, the top emerging markets (ranked 1st place as China and 2nd place as India) are weathering the economic slowdown better than developed economies. China was also seen as the number one market for foreign investment and again India in second place.
This could be a result of the low costs of labour in the associated markets leading to better economies of scale for investors, instead of producing the same goods in the host country at significantly higher labour costs, ultimately affecting their competitiveness in the global market
The Chinese are moving their exploding export market into a more sophisticated self-sustaining service sector. The Chinese and Indian labour costs are rising to a new high. The effect of this ultimately could be the movement of investment to more labour-cost efficient countries in Africa.
Also Invesco stated that emerging markets’ consumption has risen from approximately 22.5% to 37% for the past 20 years. The trend of the past decade has shown that emerging markets are the place to invest, and this is not about to change for the next decade. Double-digit returns have ensured that emerging markets receive a substantial amount of capital flowing into the economy ensuring rapid growth for the years to come.
A still reseeding problem for emerging markets, however, is poor transport infrastructure, corruption and poor government policies. Although the emerging economies have shown high growth rates, which in fact are from a lower base than developed economies. The above problems still put the Chinese and Indian economies at a disadvantage in terms of export and import efficiency. The advantage is then clearly still at the hand of Western civilization.
Emerging economies will still remain volatile, but the problem remains that the emerging economies economic growth is in a slowdown phase, then the question arises will a powerhouse like China collapse at the cause of a bubble burst or will they have a soft landing? It also can be argued that China has the power with their US dollar reserves, and with a very strong fiscal deficit giving them quite the amount of flexibility needed to excel through the current economic slowdown.
Conclusively we can say that the next economic leader is imminent, but because the Americans are the innovation leaders of the world, they still might have the edge needed to stay at the top of the rat race. Then we have large innovative development from Asian countries, as Companies like Samsung are starting to compete with the American’s leading Company Apple……. Will the American’s remain the best and largest as they have…it is anyone’s guess…..
F.M. van Heerden
ECON621 International Monetary Relations 
Good points made and I like the graphs and graphic. The challenge that you face is drawing together so many ideas in one post. You mention the importance of consumer and investment for growth. You mention elements of competitiveness, such as logistics, labout cost, poor policies and innovation. It is difficult to then make one good point. It may be better to pick one or two and then drive home the message. Also, just check some wording: reseeding is probably receding, but a spell checker won’t pick that up. Overall, a good effort.