Power Shifts, Economic Change and the Decline of the West


The article, Power shifts, economic change and the decline of the west, by Michael Cox explores how economy power has been shifting in the last decade towards east from the west. This paper explores the content of this article from an economics perspective by giving personal opinion, rationale for the views, and how the article applies to macroeconomics.

Personal View

I concur with the article there is a radical economic shift from west to the east, especially with regards to China and India. For instance, I am aware that China is establishing massive industrial parks catalyzed by a robust population of skillful citizens and first class infrastructure. India is becoming a global ICT center supported by highly skilled youthful workers who are developing first generation technological applications and quality innovations at competitive market rates as compared to the counterparts in the western world. Despite the fact that the US had the highest global gross domestic product of 26%, which is more than the GDP of India and China combined, I concur that it is estimated that the trend will change by 2025. I believe that this will happen because the two eastern countries have not stretched their factors of production such as labor, technology, and market as compared to the US. Thus, I am convinced that the shift will continue as the Indian and Chinese economies become more competitive than the US in terms of skills, cost of production, and readily available market.

Rationale for Holding this View

The youthful and innovative Indians and Chinese are very optimistic that the economic shift will propel the two countries to become the new global business and innovation leader. The youths in the two countries are well positioned to tap into the underutilized knowledge skills to acquire competitive standing in business incubation and expansion since India and China have very large population that will provide the much needed ready market for the technology based products creating the youths (Cox par. 7). The motivated generations of youthful Chinese and Indian citizens are likely to transform India and China into the next United States by utilizing the current enormous technological and business capacity that is supplementary to create the first high quality and innovative incubational business opportunities. These changes will test industrialized nations’ true commitment to global and open trade since the surplus production, competitive cost of production, and high quality innovative products will be exported to all corners of the globe (Snowdon and Vane 37).

How the Article Applies to Macroeconomics

The article discusses the current economic position and predicts a shift in economic power from the west to east as the Easter bloc countries continue to position themselves as the next economic powers. The case study presents the continued shift of economic power from west to east due to the invaluable role of innovation, quality, competitive productivity, infrastructure, business incubation, and large ready market. Besides, India and China have experienced simultaneous takeoff as China assumes the role of manufacturing giant while India takes the role leading technology and service industries (McConnell and Macpherson 29). India has better banking industry while China’s competitive market continues to lure more investments. Though China is a head of India, this trend might change in the near future due to its younger work force. The increasing economic power in the two giants is related to the ability of India and China to complement each other. Besides, the consumers are rising in the two countries. For instance, India and China have more than 500 million internet and cellular phone users besides arise in the young professional in the fields of engineering, finance, and life sciences, which are market oriented (Cox par. 13).


The article predicts that the GDP of China and India will be 28% and 17% by 2025 against the shrinking of countries in the west due to expanding economies due to expansionary economic policies, high purchasing power, and skilled labor.

Works Cited

Cox, Michael. “Power Shifts, Economic Change and the Decline of the West”. UK Government Publications. 2012, Web.

McConnell, Campbell and David Macpherson. Contemporary Labor Economics. London, UK: McGraw-Hill Education, 2013. Print.

Snowdon, Brain, and Howard Vane. Modern Macroeconomics: Its Origins, Development and Current State. New York, NY: Cheltenham, 2005. Print.