How Big a Threat to West is Growth of China?

The ongoing, rapid economic growth in developing countries like China and India might have deep repercussions in the developed West, argues Stephen King, managing director of economics at HSBC. Although per capita gross national income and commercial energy consumption is significantly lower in China and India than in the US and UK, these countries also have two of the world’s largest populations. King maintains that if economic growth continues at current levels, millions of people will be converted into middle-class consumers. Demands for global resources will increase, which in turn will affect commodity prices in the developed countries. This is already reflected in the high oil prices in the West, which King attributes to uncertainty in the Middle East but also to the buoyant Asian economies. Further, if car ownership grew in China to become on par with the US, American consumers would be forced to reduce the high amount of energy they consume today. “The West will have to get used to a world where it is no longer the monopoly buyer of the world's scarce resources,” King concludes. – YaleGlobal